AMSTERDAM: Carlos Ghosn, the fugitive former auto executive, used a joint venture between Nissan and Mitsubishi to inflate his pay, effectively clawing back a cut to his declared wages, and to cover a personal tax debt, lawyers for the companies said on Monday.
Ghosn, the former chairman of the Renault-Nissan-Mitsubishi alliance, was arrested in Japan in 2018 on financial misconduct charges but fled to Lebanon last December.
He has repeatedly denied any wrongdoing, including concerning the way he was compensated.
Nissan and Mitsubishi have been pouring over payments made to Ghosn from their Dutch-based joint venture, and had already challenged a salary and bonus worth 7.3 million which they claim he granted himself without the knowledge of their respective boards.
In new arguments submitted to a Dutch court on Monday, lawyers for the firms alleged Ghosn awarded himself that compensation to offset a cut in his declared earnings at Nissan.
Ghosn — who was under public scrutiny in Japan and France over his wages during his tenure, though he has argued since that other auto industry bosses were paid far more — had agreed to cut his pay when stepping down as Nissan CEO in April 2017.
He stayed on as chairman, and also had the top job at Renault.
Representatives of Ghosn’s legal team said the allegations of unknown or unjust payments were unfounded.
“We don’t dispute that Mr.Ghosn received a good salary,” attorney Roeland de Mol said. “But he had the heavy task of getting French and Japanese companies to cooperate. He didn’t retire to go play golf after he stepped down as Nissan CEO.”
The new details about Ghosn’s compensation emerged during a court hearing in Amsterdam centered on an unlawful dismissal suit brought by the former auto executive against the Japanese carmakers.
Ghosn is seeking 15 million euros in damages from the Nissan and Mitsubishi, who, he alleges, violated Dutch labor laws.
Nissan-Mitsubishi lawyer Eelco Meerdink said there was evidence that Ghosn made the alliance pay a personal French tax debt of €498,000 in 2018.
France’s Renault covered the cost of the bill in a first instance, and was refunded by Ghosn, who had received a payment from the Nissan-Mitsubishi joint venture for the same amount, Meerdink said. Renault declined to comment.
The lawyer also alleged that Ghosn had arranged a “pre-payment” of his 2019 salary in 2018 to avoid a scheduled increase in Dutch income tax rates.
Nissan told the Dutch court on Monday that it would request that Ghosn repay all of the compensation received from the joint venture with Mitsubishi, as there was no evidence that it had been properly authorized, a source close to Nissan said.
As part of Ghosn’s unlawful dismissal case against the Japanese carmakers, his lawyers are now pushing for the release of internal documents which the carmakers used to substantiate his removal on allegations of financial misconduct.
Ghosn’s legal team claims he was unfairly dismissed as chairman of Nissan-Mitsubishi BV, a Dutch-registered entity, because the details of the allegations were not shared with him.
His lawyers say the documents will show the companies were aware of his activities.
De Mol, the attorney, said he was pushing for “a full debate on the reasons of Ghosn’s dismissal... Mr. Ghosn is ready for a fight.”
Nissan-Mitsubishi lawyer Meerdink dismissed the demands, saying the reasons for the executive’s dismissal were clear, and that his lawyers were “going on a fishing expedition.”
The Amsterdam court said it would postpone any decision on documents until Nissan and Mitsubishi file their full case on the reasons for Ghosn’s dismissal, expected on March 26.
Ghosn used Nissan-Mitsubishi venture to inflate pay
https://arab.news/wgtmr
Ghosn used Nissan-Mitsubishi venture to inflate pay
- Ghosn was arrested in Japan in 2018 on financial misconduct charges but fled to Lebanon last December
- In a Dutch court, lawyers for the firms alleged Ghosn awarded himself compensation to offset a cut in his declared earnings at Nissan
Global brands shut Middle East stores as conflict causes chaos
- Luxury brands and retailers close stores in Middle East
- Conflict threatens the region that has been luxury’s fastest growing
- Mass-market retailers monitor situation, adjust operations in region
PARIS: In Dubai and other major Middle Eastern shopping hubs, many stores are closed or operating with a skeleton staff as the escalating conflict in the region causes chaos for businesses and travel.
The US-Israeli air war against Iran expanded on Monday with no end in sight, with Tehran firing missiles and drones at Gulf states as it retaliates for a weekend of bombing that killed Iran’s supreme leader and reportedly killed scores of Iranian civilians, including a strike on a girls’ primary school.
Chalhoub Group, which runs 900 stores for brands from Versace and Jimmy Choo to Sephora across the region, said its stores in Bahrain were closed, while other markets, including the UAE, Saudi Arabia, and Jordan remained open though staff attendance was “voluntary.”
“We operate with a lean team formed of members who volunteered and feel comfortable to come to the store,” Chalhoub’s Vice President of Communications Lynn al Khatib told Reuters, adding that the company’s leadership team personally visited Dubai Mall and Mall of the Emirates on Monday morning to check in with workers.
E-commerce giant Amazon closed its fulfillment center operations in Abu Dhabi, suspended deliveries across the region and instructed its employees in Saudi Arabia and Jordan to remain indoors, Business Insider reported on Monday, citing an internal memo.
Gucci-owner Kering said its stores were temporarily closed in the UAE, Kuwait, Bahrain and Qatar and it has suspended travel to the Middle East.
Luxury growth engine under threat
Shares in luxury groups LVMH, Hermes, and Cartier-owner Richemont were down 4 percent to 5.7 percent on Monday afternoon as investors digested the knock-on impacts of the conflict.
The Middle East still accounts for a small share of global spending on luxury — between 5 percent and 10 percent, according to RBC analyst Piral Dadhania. But the region was “luxury’s brightest performer” last year, according to consultancy Bain, while sales of expensive handbags have stalled in the rest of the world.
Now, shuttered airports have put an abrupt stop to tourism flows into the region and missile strikes — including one that damaged Dubai’s five-star Fairmont Palm hotel — are likely to dissuade travelers, particularly if the conflict drags on.
“If you assume that it’s a $5 billion to $6 billion (travel retail) market and let’s say it’s going to be shut down for a month, we are talking about hundreds of millions of dollars that are definitely at risk,” said Victor Dijon, senior partner at consultancy Kearney.
If Middle Eastern shoppers cannot travel to Paris or Milan, that could also hurt luxury sales in Europe, he added.
Luxury brands have been investing in lavish new stores and exclusive events across the region. Cartier unveiled a “high-jewelry” exhibition in Dubai’s Keturah Park just days before the conflict started.
Cartier and Richemont did not reply to requests for comment.
Luxury conglomerate LVMH has also bet big on the region. Last month, its flagship brand Louis Vuitton staged an exhibition at the Jumeirah Marsa Al Arab hotel, and beauty retailer Sephora launched its first Saudi beauty brand.
LVMH does not report specific figures for the region, but in January Chief Financial Officer Cecile Cabanis said the Middle East has been “displaying significant growth.” LVMH did not reply to a request for comment on how its business may be impacted by the conflict.
The Middle East has also attracted new investment from mass-market players. Budget fashion retailer Primark said in January that it plans to open three stores in Dubai in March, April and May, followed by stores in Bahrain and Qatar by the end of the year.
“Primark is set to open its first store in Dubai at the end of March but clearly this is a fast-moving situation which we are monitoring closely,” a spokesperson for Primark-owner Associated British Foods said.
Apple stores in Dubai will remain closed until Thursday morning, the company’s website showed, while Swedish fast-fashion retailer H&M said its stores in Bahrain and Israel are closed.
Consumer goods group Reckitt has told all employees in the Middle East to work from home, temporarily closed its Bahrain manufacturing site and suspended all business travel to the region until further notice.
