Nissan files $90m suit against Ghosn

Ghosn spent more than 100 days in detention in Japan after his sudden November 2018 arrest. (File/AFP)
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Updated 12 February 2020

Nissan files $90m suit against Ghosn

  • Ghosn faces multiple charges of financial misconduct in Japan
  • Nissan said the damages had been calculated on the basis of the cost to the firm

TOKYO: Japanese car giant Nissan on Wednesday filed a civil lawsuit to reclaim some $90 million from former chairman Carlos Ghosn for what it called “years of his misconduct and fraudulent activity.”
The 65-year-old faces multiple charges of financial misconduct in Japan but fled to Lebanon before he could face trial. He denies any wrongdoing.
Nissan said the damages had been calculated on the basis of the cost to the firm of Ghosn’s “corrupt practices.”
It accused Ghosn of “the use of overseas residential property without paying rent, private use of corporate jets, payments to his sister, payments to his personal lawyer in Lebanon.”
It said the amount was likely to rise and added that the company would also seek to sue Ghosn for “groundless and defamatory remarks” he made when he briefed the media in Lebanon.
Once hailed as a corporate savior for rescuing Nissan from the brink of bankruptcy, Ghosn was facing a trial in Japan over a series of alleged crimes, including under-reporting his compensation to the tune of around $85 million.
Ghosn spent more than 100 days in detention in Japan after his sudden November 2018 arrest, but launched an audacious escape plan while out on bail in Tokyo and managed to travel to Lebanon apparently undetected.
He believes Nissan turned on him because executives there were concerned he was moving the firm closer to French partner Renault, part of a three-way alliance with Mitsubishi Motors.
A source close to the executive scoffed at the firm’s latest move.
“Nissan’s games continue. This suit was announced the day before the financial results of the group are published,” said this source, who asked not to be identified.
“We note that after calling for months for damages of 35 billion yen, today Nissan is demanding a lower sum (10 billion yen),” added this source.


Oil-rich wealth funds seen shedding up to $225 billion in stocks

Updated 24 min 51 sec ago

Oil-rich wealth funds seen shedding up to $225 billion in stocks

  • Risking more losses is not an option for some funds from oil-producing nations

LONDON: Sovereign wealth funds from oil-producing countries mainly in the Middle East and Africa are on course to dump up to $225 billion in equities, a senior banker estimates, as plummeting oil prices and the coronavirus pandemic hit state finances.

The rapid spread of the virus has ravaged the global economy, sending markets into a tailspin and costing both oil and non-oil based sovereign wealth funds around $1 trillion in equity losses, according to JPMorgan strategist Nikolaos Panigirtzoglou.

His estimates are based on data from sovereign wealth funds and figures from the Sovereign Wealth Fund Institute, a research group.

Sticking with equity investments and risking more losses is not an option for some funds from oil-producing nations. Their governments are facing a financial double-whammy — falling revenues due to the spiraling oil price and rocketing spending as administrations rush out emergency budgets.

Around $100-$150 billion in stocks have likely been offloaded by oil-producer sovereign wealth funds, excluding Norway’s fund, in recent weeks, Panigirtzoglou said, and a further $50-$75 billion will likely be sold in the coming months.

“It makes sense for sovereign funds to frontload their selling, as you don’t want to be selling your assets at a later stage when it is more likely to have distressed valuations,” he said.

Most oil-based funds are required to keep substantial cash-buffers in place in case a collapse in oil prices triggers a request from the government for funding.

A source at an oil-based sovereign fund said it had been gradually raising its liquidity position since oil prices began drifting lower from their most recent peak above $70 a barrel in October 2018.

In addition to the cash reserves, additional liquidity was typically drawn firstly from short-term money market instruments like treasury bills and then from passively invested equity as a last resort, the source said.

It’s generally a similar trend for other funds.

“Our investor flows broadly show more resilience than market pricing would suggest,” said Elliot Hentov, head of policy research at State Street Global Advisers. “There has been a shift toward cash since the crisis started, but it’s not a panic move but rather gradual.”

The sovereign fund source said the fund had made adjustments to its actively managed equity investments due to the market rout, both to stem losses and position for the recovery, when it comes.

Exactly how much sovereign wealth funds invest and with whom remain undisclosed. Many don’t even report the value of the assets they manage.

On Thursday, the Norwegian sovereign wealth fund said it had lost $124 billion so far this year as equity markets sunk but its outgoing CEO Yngve Slyngstad said it would, at some point, start buying stocks to get its portfolio back to its target equity allocation of 70 percent from 65 percent currently.

Slyngstad also said that any fiscal spending by the government this year would be financed by selling bonds in its portfolio.