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Auditor had questioned Nissan on payments in Ghosn scandal, source says

TOKYO — Nissan's auditor had repeatedly questioned transactions at the heart of allegations of financial misconduct by former chief Carlos Ghosn, but Nissan said they were proper, a person with direct knowledge of the matter said on Wednesday. Ernst & Young ShinNihon LLC questioned Nissan's management several times, chiefly around 2013, about purchases of overseas luxury homes for Ghosn's personal use and of stock-appreciation rights that were conferred on him. But the Japanese automaker said the transactions and financial reporting were appropriate, the source told Reuters on condition of anonymity. The revelation shows Nissan and its auditor were discussing the transactions, in apparent contrast with Nissan's contention that the alleged misreporting of benefits for Ghosn was masterminded by Ghosn and a key lieutenant. A spokesman for EY ShinNihon, the Japanese affiliate of global accounting firm Ernst & Young, said he could not comment on specific cases. A Nissan spokesman declined to comment. Ghosn was arrested on Nov. 19 as he arrived in Japan. Prosecutors accuse him of falsifying Nissan's annual reports to understate by about half his total compensation of some 10 billion yen ($90 million) over several years. The high-profile former executive has denied the allegations, according to Japanese media. Ghosn remains in custody and is unable to speak publicly. He is represented by former prosecutor Motonari Otsuru, according to Japanese media. Otsuru's law firm declined to comment on Wednesday, and Otsuru has not responded to requests for comment. Nissan has largely pinned the blame on Ghosn and Greg Kelly, a former representative director who was arrested along with Ghosn on the same allegations. "As a result of the investigation, we are certain these two are the masterminds," CEO Hiroto Saikawa told a news conference on Nov. 19, referring to Ghosn and Kelly. He declined to say whether others at Nissan were involved in the alleged wrongdoing. An internal investigation is ongoing, and Nissan says it is cooperating with prosecutors. Nissan and Mitsubishi Motors have removed Ghosn as chairman in the wake of his arrest. The French member of the three-firm alliance, Renault, retains him as chairman and CEO.

Mitsubishi Lancer Evo X Final Edition gets official for Japan only

It'll be the end of an era when Mitsubishi discontinues the Lancer Evolution, putting to rest a dynasty that challenged the Subauru WRX STI for decades. But before it does, the Diamond-Star automaker is sending off its most celebrated model with the Final Edition you see here. Unfortunately, it's nowhere near as cool as the concept. While the showcar pumped the output from its 2.0-liter turbo four to 473 horsepower thanks to a remapped ECU and a fresh HKS turbocharger, the production version is sticking with the stock 296 hp. It's otherwise based on the GSR model, so it's got a five-speed gearbox, but packs a long list of top-shelf equipment: BBS alloys, Bilstein shocks, Eibach springs, Brembo brakes, Recaro seats... the works. Mitsubishi will only offer 1,000 examples of the Evo X Final Edition in Japan, where buyers will be able to choose between five exterior colors and a contrasting roof in black or white. We don't know at this point whether a similar special will be offered Stateside, but if it is, we hope it'll pack at least some of the concept's power upgrades (we can dream, right?).

Carlos Ghosn's jail time extended, as family says he was framed

TOKYO — Former Nissan chairman Carlos Ghosn will be detained at least through Jan. 11, the Tokyo District Court said Monday, as the once-revered auto industry figure faces allegations that have marked a stunning downfall. Ghosn, who led Nissan Motor Co. for two decades and helped save the Japanese automaker from near bankruptcy, was arrested Nov. 19 on suspicion of falsifying financial reports. He also faces a breach of trust allegation, for which his detention had been approved previously through Jan. 1. The Tokyo District Court said in a statement that it had approved prosecutors' request for a 10-day extension. Ghosn has been charged in the first set of allegations, about under-reporting Ghosn's pay by about 5 billion yen ($44 million) in 2011-2015. Related: Top 10 automotive stories of 2018 Those close to Ghosn and his family say he is asserting his innocence as the alleged underreported amount of money was never really decided or paid, and Nissan never suffered any monetary losses from the alleged breach of trust. It is unclear when Ghosn may be released on bail. Tokyo prosecutors consider Ghosn, a Brazilian-born Frenchman of Lebanese ancestry, a flight risk. In Japan, formal charges can mean a suspect will get detained for months, sometimes until the trial starts, because of fears of tampered evidence. Some experts are puzzled that the allegations against Kelly and Ghosn are about underreporting income from Nissan. Nissan is in charge of filing such financial reports, not individual executives. Over the weekend, The New York Times published an article, "The Rise and Fall of Carlos Ghosn," describing his arrest as well as his almost legendary ascendance as the outsider who saved Nissan: "He was a person who was above the clouds," said one Nissan employee. But it's clear from the article that his autocratic style has long rankled the Japanese. In a sidebar, the NYT also covered accusations from Ghosn's daughters that Nissan had set him up for a fall, part of a mutiny against his explorations of a merger between Nissan and Renault. They point out that Hiroto Saikawa, the chief executive of Nissan, complained about the nature of the alliance in the first news conference following Ghosn's arrest. "Wow," daughter Caroline Ghosn said. "He didn't even waste a breath. He didn't even try to cover up the fact that the merger had something to do with this." The NYT articles included Ghosn family photos showing a softer side to the stern auto executive.