EXCLUSIVE: Prosecutors Doubt Ghosn’s Claim about Swap Contracts

January 11, 2019

Tokyo--Japanese public prosecutors doubt disgraced automotive executive Carlos Ghosn's claim that currency swap contracts, at the center of aggravated breach of trust charges against him, were concluded for hedging purposes, informed sources told Jiji Press on Friday.

Ghosn, former chairman of Nissan Motor Co. <7201>, is expected to face additional indictment on Friday, for allegedly transferring the swap positions, with appraisal losses totaling 1.85 billion yen, to the Japanese automaker in October 2008.

The currency swap contracts were made between his asset management firm and Shinsei Bank <8303> in 2006 and 2007, and the losses were incurred amid the 2008 financial crisis, according to the sources.

In a hearing at Tokyo District Court on Tuesday, Ghosn claimed that he chose to have the yen-dollar swap contracts after his request to receive executive compensation in dollars was rejected by Nissan.

However, as the swap contracts allowed trading on leverage of a few times, the prosecutors suspect speculative motives behind the contracts, the sources said.

The swap contracts were later returned to the Ghosn side after Saudi businessman Khaled Juffali helped him secure a credit guarantee of 3 billion yen to resolve a collateral shortfall.

Ghosn is also suspected of paying for Juffali's cooperation a total of 14.7 million dollars from Nissan reserves between June 2009 and March 2012. Jiji Press