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Nissan’s questionable Zi-A Capital subsidiary excluded from consolidated accounting

Yumiko Kurashige / The Yomiuri Shimbun

The home believed to have been bought for former Nissan Chairman Carlos Ghosn’s private use in Beirut.

The Yomiuri ShimbunNissan Motor Co. subsidiary Zi-A Capital BV, allegedly used by former Nissan Chairman Carlos Ghosn to purchase houses for his family among other private purposes, has been excluded from company’s consolidated accounting since it was established, according to sources close to the matter. Apparently, the Amsterdam-based subsidiary was excluded so Nissan’s auditors would not find any problems with it.

According to the sources, Nissan established Zi-A Capital in December 2010 as an investment vehicle, funding it with more than ¥5 billion ($44.3 million). Ghosn asked former Representative Director Greg Kelly to direct Nissan executive officers and others to go through the procedures to establish Zi-A Capital, the sources said.

Kelly and others exempted Zi-A Capital upon its founding from being associated with Nissan’s consolidated accounting. Documents filed with a Dutch chamber of commerce and industry reveal the names of the Nissan executive officers as Zi-A Capital’s executives, including Kelly’s, but there are no employees listed.

According to sources, the special investigation squad of the Tokyo District Public Prosecutors Office has gained information on how Zi-A Capital was established after agreeing to plea bargaining deals with the executive officers who were involved in forming the subsidiary.

In 2011 and 2012, Zi-A Capital spent about ¥2.1 billion to buy luxurious houses in Brazil and Lebanon and renovate one of them through shell companies formed outside the Netherlands. There seem to have been no records of any investments made, the subsidiary’s stated purpose, as Nissan’s internal investigation found that those houses were actually used by Ghosn’s family.

From 2012 to 2014, the auditing firm for Nissan made inquires about Zi-A Capital as the auditor felt that the actual activities were unclear. Nissan responded that the affiliated company performed strategic investment and that there were no problems. The auditing firm did not pursue the matter further as it had no authority to audit Zi-A Capital since the subsidiary was not part of Nissan’s consolidated accounting, according to sources.

As for houses overseas bought or renovated by Zi-A Capital, Ghosn has told those around him after being arrested that he was using them for work and that there was no problem, sources said.

Kelly reportedly has said that those houses were bought because it was costly to stay in hotels each time and that Ghosn planned to buy them at appropriate prices after his retirement.

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