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A Look Inside Saudi’s Nissan Motors Scam: Cheating the Japanese MNC

Last updated on January 6th, 2019

Tokyo prosecutors have brought forward new allegations surrounding ousted Nissan Chairman, Carlos Ghosn, stating the use of company funds to pay a Saudi businessman who plausibly helped him out of financial difficulties, two company sources with knowledge of the matter said.

Prosecutors arrested Ghosn for the third time on Friday and accused him of breach of trust in transferring personal investment losses in the company’s accounts. Besides, as per the statement of the prosecutors, in around October 2008, Ghosn was suffering from losses on papers of 1.85 billion yen ($16.6 million), which he incurred on an unnamed swap contract with a bank.

It was then that a person helped Carlos Ghosn arrange a letter of credit and the company run by this person received payments for it worth $14.7 million in Nissan funds. The payments were made in four installments between 2009 and 2012, the statement accused, adding that the money was transferred in Ghosn’s and the person’s interests.

According to the Nissan sources having knowledge of the company’s inquest into its former chief, Carlos Ghosn was helped by Khaled Al-Juffali. Juffali is the vice chairman of one of Saudi Arabia’s largest conglomerates, E. A. Juffali and Brothers, and a member of the board at the Saudi Arabian Monetary Authority. He is also the owner of a company called Al-Dahana, which owns half of the regional joint venture called Nissan Gulf with the other half held by a wholly owned unit of Nissan motor.

Besides, as per other media sources, Ghosn through his lawyer has denied that he shifted losses to Nissan and has also commented that the payments were for ‘legal business purposes’.

On Sunday, the prosecutor’s office extended his detention for 10 days though they declined to comment about Ghosn’s reported comments, as a Nissan spokesman said: “We cannot comment on matters related to Ghosn’s arrest for breach of trust. Nissan’s own investigation is ongoing, and its scope continues to broaden.”

The first payment of $3 million was made in 2009, followed by payments of $3.6 million, $3.9 million and $4.2 million in the following years, the sources claimed. Japan, by arresting Carlos Ghosn, has proven its intolerance for corruption. It has done so regardless of the fact that one of the cheating parties involved was a wealthy Arab nation like Saudi Arabia.

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