Carlos Ghosn, Photo: Junko Kimura-Matsumoto/Bloomberg

An overhaul of Nissan Motor Co.'s compliance and whistleblower system last year apparently paved the way for a complaint that led to the arrest of the Japanese carmaker's now-ousted chairman Carlos Ghosn, according to a report in the Wall Street Journal.

The embattled auto industry titan is accused by authorities in Japan of under-reporting his income and misusing company money.

According to the WSJ report, in October 2017, while Nissan was dealing with the fallout over its admitted failure to comply with Japanese vehicle inspection rules for exhaust emissions, company CEO Hiroto Saikawa spearheaded an effort to strengthen the carmaker's compliance system.  

Nick Maxfield, a spokesman for Nissan in Yokohama, Japan, confirmed in an email to Corporate Counsel that last year the company “established a globally integrated reporting system” dubbed “SpeakUp.” He said the system lets employees anonymously report suspected violations of the company's code of conduct and other rules. It also allows tipsters to have two-way confidential communications with Nissan employees and stakeholders.

Employees can report their concerns and ask compliance questions on Nissan's SpeakUp website, which Maxfield said is available in more than 20 languages. In fiscal year 2017, Nissan employees throughout the world reported 1,022 “issues and questions,” 335 of which centered on compliance-related matters, according to Maxfield.

“This is an increase over the previous year,” he said. (A tally of reports filed in fiscal year 2016 was not immediately available.) “This trend is as expected, and indicates that the compliance programs are working effectively and more employees have started to raise their concerns using the internal reporting system,” Maxfield said.

The Wall Street Journal reported that corporate auditors used the new system to file a whistleblower complaint against Ghosn, citing a “person familiar with the investigations by Nissan and prosecutors.” An earlier report from Reuters based on “Japanese media reports” identified the informant as a member of Nissan's legal department.  

The complaint reportedly spurred Japanese authorities to arrest Ghosn in Tokyo. He has not been charged but is being detained while an investigation unfolds. Ghosn, who has denied any wrongdoing, is accused of failing to disclose more than $80 million in deferred compensation and spending about $18 million in company money on several residences.

After Ghosn's arrest Nov. 19, Nissan and its Japanese partner Mitsubishi removed him as chair of the companies. A third partner in the alliance, French carmaker Renault, has yet to follow suit. Its refusal to oust Ghosn led to speculation that the partnership with Nissan and Mitsubishi was in trouble.

Renault briefly addressed the situation Thursday when it stated that boards of directors for all three carmakers have “emphatically reiterated their strong commitment to the alliance” and “we remain fully committed” to the partnership.

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