Lebanese Firm at Center of Alleged Payments Connected to Ghosn and Son

(Bloomberg) -- A Lebanese company is at the center of alleged payments linking Nissan Motor Co. and its partner Renault SA to a firm related to jailed former auto titan Carlos Ghosn and his son, according to people familiar with the matter.

The automakers suspect that Good Faith Investments, a Beirut-based company known as GFI, facilitated money transfers to a firm connected to Carlos and Anthony Ghosn, said the people, who asked not to be named because these details aren’t public. Japanese prosecutors indicted Carlos Ghosn Monday on charges of misdirecting Nissan funds for personal use, after arresting and detaining him again earlier in the month.

Lebanese Firm at Center of Alleged Payments Connected to Ghosn and Son

The architect behind what is the world’s biggest auto alliance, Ghosn has denied the latest charges, which follow earlier indictments for transferring personal trading losses to Nissan and under-reporting his income. The shock downfall in Tokyo of the the former chairman of Nissan and Renault has rattled the auto union between the two companies and smaller partner Mitsubishi Motors Corp., amid a period of disruption in the global car industry.

Reserve Fund

Prosecutors allege Ghosn siphoned off millions of dollars from funds Nissan sent to an overseas distributor between 2015 and 2018.

While Japanese authorities haven’t disclosed the name of the distributor, investigations by Nissan and Renault are said to have found that the automakers made payments to Oman-based Suhail Bahwan Automotive Group -- known as SBA -- under the guise of marketing incentives. The Japanese automaker also filed a criminal complaint against Ghosn Monday for allegedly deploying company funds for personal use.

Nissan and Renault’s contributions to SBA over consecutive years were made through a reserve fund overseen by Ghosn, which is not normal practice for payments of this type, according to the people.

SBA is then suspected of having made payments to the Lebanese holding company GFI through a person named Divyendu Kumar, a senior executive at the parent company of SBA, according to two of the people. A filing by Beirut-based GFI shows he is also chairman and majority owner of that company.

Multiple attempts to contact Kumar didn’t yield a response and SBA didn’t respond to emails and calls seeking comment. A representative for GFI could not be reached.

Son’s Startup

Ghosn asked for money transfers from GFI to Shogun Investments LLC, which counts his son Anthony among its managers, according to the people. Between 2015 and 2018, GFI transferred more than $25 million to Shogun Investments, which was set up by Ghosn as an investment vehicle, they said.

Renault investigators suspect money from the carmaker was used for Anthony Ghosn’s fintech startup, Shogun Enterprises Inc., and the purchase of a yacht, people familiar with the situation told Bloomberg previously.

Anthony Ghosn has denied that Shogun Enterprises received funds from Nissan and Renault, telling Japanese TV Asahi on April 13 that the firm didn’t get money from GFI and that there are at least 10 companies called Shogun. He declined to comment at the time on whether any funds from the carmakers had gone into any other companies related to Shogun Enterprises.

Other Shoguns

A spokesman for the Ghosn family, his lawyer and Anthony Ghosn didn’t return repeated requests for comment for this story. It’s unclear whether Carlos Ghosn has a formal role in Shogun Investments or related companies. Anthony Ghosn is listed in a U.S. stock market filing as a manager of at least one other company named Shogun: New-York-based Shogun Emergence Capital Fund.

Renault and Nissan declined to comment on specific allegations, but a spokesman for Nissan noted that “further discoveries related to Ghosn’s misconduct continue to emerge.”

“The company’s focus remains on addressing weaknesses in governance that failed to prevent this misconduct,” he said by email.

Ghosn’s initial arrest in November at a Tokyo airport was triggered by a Nissan probe into its activities that was shared with Japanese prosecutors.

Nissan and Renault started a joint inquiry into their former chairman earlier this year but have provided few public details on the investigation. Renault earlier this month flagged questionable payments to a distributor in the Middle East and said the findings could lead to legal action in France. Ghosn’s lawyer has said this may have triggered his client’s latest arrest.

©2019 Bloomberg L.P.

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