The Japan News/ANN
The expensive houses in Brazil and Lebanon for former Nissan Motor Co. Chairman Carlos Ghosn were purchased by funds provided by the company via British Virgin Islands companies in the Caribbean Sea as a tax haven, according to sources.
Ghosn, 64, has been arrested on suspicion of falsifying his remuneration on the company’s securities reports, and was dismissed from the posts of representative director and chairman on Thursday.
There is a possibility that Ghosn and other executives may have used the tax haven to conceal the opaque flow of funds, the sources said. The special investigation squad of the Tokyo District Public Prosecutors Office is investigating the case.
Tax havens are countries or regions that attract tax avoidance schemes for corporations and individuals because their rates for corporate and income taxes are extremely low, or no tax is imposed. They are characterized by loose restrictions and confidentiality from financial institutions.
According to sources, Nissan established its subsidiary Zi-A Capital in Amsterdam in December 2010. The subsidiary is believed to be a company ostensibly for investment purposes and Nissan has provided more than 5 billion yen (US$44.3 million) to it.
According to documents obtained from a local chamber of commerce and industry, Greg Kelly, who was one of Ghosn’s close aides, served as director of the subsidiary and there are no employees.
Kelly, 62, has been arrested on suspicion of violating the Financial Instruments and Exchange Law and was dismissed from the post of representative director of Nissan on Thursday.
From 2011 to 2012, Zi-A set up a company based on the British Virgin Islands, which is known as a tax haven, through which the subsidiary purchased an expensive condominium near Copacabana beach in Rio de Janeiro for about 600 million yen.
During the same period, Zi-A also established another company on the Virgin Islands. Zi-A bought an expensive house in the Lebanese capital city of Beirut for about 900 million yen through this other company on the Virgin Islands and a local corporation in Lebanon, sources said. Later, about 600 million yen was used to renovate the house.
The cost for buying the houses and renovating one of them totaled about 2.1 billion yen. Following their purchase, the condominium in Rio de Janeiro has been managed by Ghosn’s elder sister while she lives there. The house in Beirut is used mainly by his family, according to sources.
It was revealed that an auditing firm for Nissan made inquiries to Nissan from 2012 to 2014 about Zi-A’s activities, as the auditing firm felt that the actual activities were unclear, according to sources. The two companies on the Virgin Islands are believed to be paper companies.
According to sources, Kelly, who received instructions from Ghosn, ordered executive officers under him at Nissan to purchase the overseas houses through Zi-A and two companies on the Virgin Islands.
This article appeared on The Japan News newspaper website, which is a member of Asia News Network and a media partner of The Jakarta Post