TOKYO: One of the biggest mysteries surrounding the arrest of Nissan’s former chairman Carlos Ghosn is over how he allegedly could have underreported his income by millions of dollars for years and why the company is going after the suspected wrongdoing now.
Ghosn, who headed the Renault-Nissan-Mitsubishi Motors auto alliance, was arrested Nov. 19 on suspicion he underreported his income by $44 million over five years, or about half of what he was really making. Nissan Motor Co. and Mitsubishi have ousted him as chairman; the board of Renault SA of France says it’s waiting for more evidence.
Nissan is among a growing list of top-name Japanese companies whose corporate governance has been found lacking in recent years.
“Wait a minute. Who wrote the financial statements? The accountants. Who audited them? The auditors,” Christopher Richter, auto analyst for CLSA Securities Japan Co., said of the case. “How do you do this without other people being complicit?“
Japanese prosecutors say Ghosn and another Nissan executive, Greg Kelly, an American suspected of collaborating with him, were arrested because they are considered flight risks. But the timing of the scandal, given the length and scale of the alleged wrongdoing, is raising questions.
Why did Nissan choose to come forward now, asks Eric Schiffer, chief executive of Reputation Management Consultants in the Los Angeles, California, area.
“If Nissan knew about this all along and decided to pull the trigger, such Machiavellian tactics will significantly backfire on the brand,” Schiffer said.
Japanese media have reported that two other company employees contacted authorities as whistleblowers and sought plea deals. Ghosn has not made any public statements about the case.
Kelly’s American lawyer Aubrey Harwell said his client, who was dismissed as a Nissan executive director after his arrest, did nothing wrong.
Kelly acted “according to the law and according to company policy,” Hartwell said. “He had talked to people in the company and to outsiders, and he believed everything he did was done totally legally,” he said in a telephone interview from his office in Nashville, Tennessee.
Prosecutors have released very little information. Neither man has been officially charged. Under the Japanese system, suspects can be held for weeks for questioning without any charges.
A source familiar with an internal investigation by Nissan said the hidden salary was categorized as “deferred income,” meaning it was promised for later on, such as after Ghosn’s retirement, and the documents promising the money were kept secret from auditors and others. He spoke on condition of anonymity as he was not authorized to discuss such details.
One possible motive is that Ghosn was seeking to avoid public criticism over his multi-million dollar paychecks, which are a rarity in Japan even for top executives. Even the underreported amounts, about 1 billion yen ($9 million) each year, drew unwelcome scrutiny and commentary.
Ghosn was forced to defend his salary at shareholders’ meetings beginning in 2010, when Japan began requiring the disclosure of individual executive pay.
Executive pay packages in the west tend to be higher — Toyota Motor Corp.’s Chief Executive Akio Toyoda earns less than 400 million yen ($3.5 million) a year. But many Japanese companies lack the sorts of systematic checks required for publicly listed US companies. That includes periodically changing who checks financial statements instead of having the same people do it for many years.
Japan needs independent oversight for executive pay, said corporate governance expert Takuji Saito, who teaches at Keio Business School.
“The problem here was that the pay was significant, in line with global standards, but the way it was decided was still so Japanese,” he said of Nissan’s lack of transparency. “Nissan deserves criticism for having allowed this to continue unchecked for so long.”
Saito believes that failing to report deferred income is still “a gray area in criminality” in Japan, but a clear problem in corporate governance.
It’s certainly turned out to be a big problem for Ghosn, 64. He is being held at a Tokyo detention center pending his indictment or release and has hired Paul, Weiss, Rifkind, Wharton & Garrison LLP to represent him.
Japanese media say, without citing sources, that Ghosn is asserting his innocence, insisting he always wanted his income reports to be legal and denying he signed secret documents. Prosecutors have refused to comment.
Whether a suspect intended to commit a crime or did it unknowingly is important in determining criminality under Japanese law.
Nissan veteran Hiroto Saikawa, who took over from Ghosn as the automaker’s chief executive last year, has harshly criticized his former boss and vowed to instill greater transparency and accountability at Nissan. The company is setting up a panel of outsiders to come up with recommendations, including reviewing the company’s executive compensation system.
The raft of scandals at many blue chip Japanese companies suggests managers are struggling to meet sometimes overly ambitious profit targets amid slowing demand, labor shortages, rising costs and intensifying competition. But they also highlight a rift between old-guard practices and an increasingly global business world in Japan.
— Major steelmaker Kobe Steel was charged with violating competition laws after massive faking over many years of quality data for products sent to hundreds of companies, including aluminum castings and copper tubes for autos, aircraft, nuclear power plants, appliances and trains. Kobe Steel said a zealous pursuit of profit, unrealistic targets and an insular corporate culture caused the wrongdoing.
— In 2016, Mitsubishi Motors Corp. disclosed it falsified mileage data. That followed a massive cover-up over decades of auto defects thought to have helped cause a fatal accident. In 2004 its president, Katsuhiko Kawasoe, was arrested. He was sentenced to three years in prison, suspended for five years, and did not serve time in jail.
— In 2015, electronics maker Toshiba Corp. said it had doctored its books in a systematic accounting cover-up that began in 2008 or earlier. The company declared bankruptcy, stricken by troubles in its nuclear business after multiple meltdowns in March 2011 at a power plant in Fukushima, northeastern Japan.
— Beginning in 2014, auto parts supplier Takata Corp. recalled more than 100 million defective air-bag inflators linked to 25 deaths and more than 180 injuries worldwide. Last year, Takata pleaded guilty to fraud in a US court and agreed to pay more than $1 billion (109 billion yen) in penalties.
These scandals and more, from faked data to cutting corners, have driven calls for stricter corporate oversight. Reflecting widespread sentiments, Schiffer, the brand management expert, says he finds it hard to believe Nissan insiders weren’t aware of what was going on earlier.
Otherwise, they were “incompetent,” he said.
Ghosn’s legal woes highlight governance failings in Japan
Ghosn’s legal woes highlight governance failings in Japan
- Nissan is among a growing list of top-name Japanese companies whose corporate governance has been found lacking in recent years
- Japanese media have reported that two other company employees contacted authorities as whistleblowers and sought plea deals
Global Markets — stocks and dollar dip as Trump’s spending bill passes, trade deal deadline nears
LONDON: Stocks slipped on Friday as US President Donald Trump got his signature tax cut bill over the line and attention turned to his July 9 deadline for countries to secure trade deals with the world’s biggest economy.
The dollar also fell against major currencies with US markets already shut for the holiday-shortened week, as traders considered the impact of Trump’s sweeping spending bill which is expected to add an estimated $3.4 trillion to the national debt.
The pan-European STOXX 600 index fell 0.8 percent, driven in part by losses on spirits makers such as Pernod Ricard and Remy Cointreau after China said it would impose duties of up to 34.9 percent on brandy from the EU starting July 5.
US S&P 500 futures edged down 0.6 percent, following a 0.8 percent overnight advance for the cash index to a fresh all-time closing peak. Wall Street is closed on Friday for the Independence Day holiday.
Trump said Washington will start sending letters to countries on Friday specifying what tariff rates they will face on exports to the US, a clear shift from earlier pledges to strike scores of individual deals before a July 9 deadline when tariffs could rise sharply.
Investors are “now just waiting for July 9,” said Tony Sycamore, an analyst at IG, with the market’s lack of optimism for trade deals responsible for some of the equity weakness in export-reliant Asia, particularly Japan and South Korea.
At the same time, investors cheered the surprisingly robust jobs report on Thursday, sending all three of the main US equity indexes climbing in a shortened session.
“The US economy is holding together better than most people expected, which suggests to me that markets can easily continue to do better (from here),” Sycamore said.
Following the close, the House narrowly approved Trump’s signature, 869-page bill, which averts the near-term prospect of a US government default but adds trillions to the national debt to fuel spending on border security and the military.
Trade the key focus in Asia
Trump said he expected “a couple” more trade agreements after announcing a deal with Vietnam on Wednesday to add to framework agreements with China and Britain as the only successes so far.
US Treasury Secretary Scott Bessent said earlier this week that a deal with India is close. However, progress on agreements with Japan and South Korea, once touted by the White House as likely to be among the earliest to be announced, appears to have broken down.
The US dollar index had its worst first half since 1973 as Trump’s chaotic roll-out of sweeping tariffs heightened concerns about the US economy and the safety of Treasuries, but had rallied 0.4 percent on Thursday before retracing some of those gains on Friday.
As of 2:00 p.m. Saudi time it was down 0.1 percent at 96.96.
The euro added 0.2 percent to $1.1773, while sterling held steady at $1.3662.
The US Treasury bond market is closed on Friday for the holiday, but 10-year yields rose 4.7 basis points to 4.34 percent, while the two-year yield jumped 9.3 bps to 3.882 percent.
Gold firmed 0.4 percent to $3,336 per ounce, on track for a weekly gain as investors again sought refuge in safe-haven assets due to concerns over the US’s fiscal position and tariffs.
Brent crude futures fell 64 cents to $68.17 a barrel, while US West Texas Intermediate crude likewise dropped 64 cents to $66.35, as Iran reaffirmed its commitment to nuclear non-proliferation.
World food prices tick higher in June, led by meat and vegetable oils
PARIS: Global food commodity prices edged higher in June, supported by higher meat, vegetable oil and dairy prices, the UN Food and Agriculture Organization has said.
The FAO Food Price Index, which tracks monthly changes in a basket of internationally traded food commodities, averaged 128 points in June, up 0.5 percent from May. The index stood 5.8 percent higher than a year ago, but remained 20.1 percent below its record high in March 2022.
The cereal price index fell 1.5 percent to 107.4 points, now 6.8 percent below a year ago, as global maize prices dropped sharply for a second month. Larger harvests and more export competition from Argentina and Brazil weighed on maize, while barley and sorghum also declined.
Wheat prices, however, rose due to weather concerns in Russia, the EU, and the US.
The vegetable oil price index rose 2.3 percent from May to 155.7 points, now 18.2 percent above its June 2024 level, led by higher palm, rapeseed, and soy oil prices.
Palm oil climbed nearly 5 percent from May on strong import demand, while soy oil was supported by expectations of higher demand from the biofuel sector following announcements of supportive policy measures in Brazil and the US.
Sugar prices dropped 5.2 percent from May to 103.7 points, the lowest since April 2021, reflecting improved supply prospects in Brazil, India, and Thailand.
Meat prices rose to a record 126.0 points, now 6.7 percent above June 2024, with all categories rising except poultry. Bovine meat set a new peak, reflecting tighter supplies from Brazil and strong demand from the US. Poultry prices continued to fall due to abundant Brazilian supplies.
The dairy price index edged up 0.5 percent from May to 154.4 points, marking a 20.7 percent annual increase.
In a separate report, the FAO forecast global cereal production in 2025 at a record 2.925 billion tonnes, 0.5 percent above its previous projection and 2.3 percent above the previous year.
The outlook could be affected by expected hot, dry conditions in parts of the Northern Hemisphere, particularly for maize with plantings almost complete.
Saudi Arabia posts 4 years of VC growth despite global slowdown: report
RIYADH: Saudi Arabia achieved four consecutive years of growth in venture capital relative to its economy, a feat unmatched among its peers, according to a new report.
Between 2020 and 2023, the Kingdom was the only large market in the sample to post uninterrupted annual gains in VC intensity, contrasting with the more episodic deal flow seen across Africa and parts of Southeast Asia, MAGNiTT’s recently published Macro Meets VC report stated.
While 2024 saw a slight contraction in funding amid global tightening, Saudi Arabia’s multi-year upward trend signals a sustained commitment to innovation-led diversification.
The Kingdom is steadily consolidating its position as a model for policy-driven venture capital development in emerging markets as it seeks to diversify its economy in line with the Vision 2030 blueprint.
“Saudi Arabia is becoming the model for long-term, policy-driven ecosystem building,” the report notes, highlighting that sovereign limited partners and local funds have been instrumental in buffering the Kingdom from some of the volatility that struck other emerging venture markets.
Saudi Arabia’s policy momentum
The MAGNiTT data revealed that Saudi Arabia recorded a five-year average VC-to-GDP ratio of 0.07 percent.
Although this figure remains modest compared to more mature hubs like Singapore, its consistent upward movement underscores the growing depth of domestic capital formation.
Beyond the headline ratios, the Kingdom’s strategic positioning has also come into sharper focus. Saudi Arabia, along with the UAE, is classified as a “Growth Market”— a designation that reflects not only a sizeable GDP and population but also the rising economic clout of local consumer and enterprise demand.
With a GDP approaching $950 billion and a population exceeding 33 million, Saudi Arabia presents a significant scale advantage.
According to MAGNiTT’s benchmarking, this size creates “natural expansion targets for startups moving beyond initial launch markets,” supporting both regional and international founders seeking to diversify beyond smaller ecosystems.
MENA’s uneven progress
Across the broader Middle East and North Africa region, venture capital activity has continued to evolve unevenly.
The UAE has retained its reputation as a strategic innovation hub and one of the few “MEGA Markets” in the emerging world, boasting a five-year average VC-to-GDP ratio of 0.20 percent.
This proportion — identical to Indonesia’s ratio — signifies robust venture activity relative to the economy’s size.
Yet, while the UAE maintained this level, Saudi Arabia has seen more consistent growth in funding, a dynamic the report attributes to policy-led market development.
In Egypt, VC has gained further traction over the period under review. Egypt achieved a 25 percent rise in total funding compared to the previous five-year average, lifting its VC-GDP ratio by 0.02 percentage points to 0.11 percent.
Although Egypt’s overall economic constraints remain acute — GDP per capita still lags below $10,000 — the relative progress suggests improving investor confidence, particularly in fintech and e-commerce.
However, the report cautions that deal flow in Egypt, much like in Nigeria, remains fragile and prone to episodic swings driven by a handful of large transactions.
The macroeconomic context across MENA has also been influential. Elevated oil price volatility and the impact of the Israel–Iran conflict have created a challenging backdrop for policymakers.
Brent crude surged more than 13 percent in a single day earlier in 2025, underscoring the region’s exposure to external shocks.
Nevertheless, both Saudi Arabia and the UAE managed to maintain monetary policy stability in line with the US Federal Reserve’s cautious stance.
Saudi Arabia kept its benchmark rate at 5.5 percent, supported by inflation trending around 2 percent, while the UAE held steady at 4.4 percent.
These decisions reflected a delicate balance between containing price pressures and supporting economic diversification efforts.
Overall, MENA’s five-year aggregate venture funding reached $12.52 billion. Although this total remains well below the levels seen in more mature regions, it represents a meaningful share of emerging markets capital.
MENA also posted the highest deal count relative to its peers in Southeast Asia and Africa over the period, indicating a broader base of early-stage transactions even as late-stage funding remains more limited.
The report emphasizes that expanding geographic and sectoral reach within MENA will be critical to boosting efficiency metrics.
“VC remains heavily concentrated in a few sectors and cities,” the report observes, warning that without broader inclusion, capital intensity will struggle to match potential.
Southeast Asia’s VC benchmark
Beyond MENA, Southeast Asia’s ecosystem stands out as the most mature among emerging venture markets, driven primarily by Singapore’s exceptional performance.
Over the 2020–2024 period, Singapore achieved a 5-year average VC-to-GDP ratio of 1.3 percent, surpassing not only all emerging markets but also developed economies such as the US, which registered 0.79 percent, and the UK, with 0.73 percent.
Even with a 5.4 percent decline in total funding compared to the prior five years and a 0.19 percentage point drop in VC-GDP ratio, Singapore maintained unmatched capital efficiency.
The report describes the city-state as “a benchmark for capital efficiency in venture ecosystems,” attributing this strength to strong regulatory frameworks, institutional capital participation, and a deep bench of experienced founders and investors.
Indonesia, Southeast Asia’s largest economy, recorded total VC funding volumes nearly twice as large as Singapore’s over five years, but its relative VC-GDP ratio remained lower at 0.2 percent.
This dynamic illustrates one of the report’s core findings: venture capital inflows correlate more strongly with GDP per capita than total GDP.
In Indonesia’s case, while its GDP surpassed $1.2 trillion, GDP per capita hovered around $4,000, constraining purchasing power and, by extension, startup revenue potential.
Thailand, meanwhile, reported funding gains due mainly to a single mega deal rather than systematic improvements in ecosystem depth.
In Africa, Nigeria emerged as an unexpected bright spot in 2024, as a single major transaction lifted its VC-GDP ratio to 0.15 percent — the highest in the region for that year.
However, this outlier result also revealed the episodic nature of capital deployment in developing markets.
Kenya registered a relatively high five-year VC-GDP ratio of 0.3 percent, even as absolute funding volumes remained modest.
The report notes that in low-GDP contexts, this ratio can overstate ecosystem maturity.
South Africa and Egypt showed more modest growth trajectories, weighed down by persistent inflation, structural constraints, and capital scarcity.
In aggregate, African economies continued to lag both Southeast Asia and MENA in total venture funding and deal velocity.
Global challenges ahead
Globally, the five years covered by the report were marked by intensifying volatility.
High interest rates, trade tensions, and geopolitical uncertainty weighed on capital flows.
The US Federal Reserve held its policy rate between 4.25 percent and 4.5 percent through mid-2025, citing “meaningful” inflation risks.
The European Central Bank moved to lower its deposit rate to 2 percent, reflecting cooling inflation but acknowledging sluggish growth.
The World Bank cut its global GDP forecast for 2025 to 2.3 percent, the weakest pace since the 2008 crisis, excluding recessions.
These headwinds contributed to the decline in venture capital across most emerging markets in 2024.
In response, sovereign capital and strategic investors have become increasingly important backstops.
The report highlights that domestic capital formation in MENA has partially offset declining global risk appetite.
However, these funds tend to be slower moving, more sector-concentrated, and less risk-tolerant than international investors.
“Without renewed foreign inflows or regional exit pathways, deal velocity may remain muted into the second half of 2025,” the report warns.
This environment is likely to force startups to extend runway and compel general partners to adopt more selective deployment strategies.
Despite the challenges, the outlook for Saudi Arabia and other growth markets remains constructive over the medium term.
The Kingdom’s policy clarity, deepening institutional capital pools, and Vision 2030 commitments create a foundation for continued expansion.
As the report concludes: “High GDP markets like KSA and Indonesia trail in VC efficiency — suggesting capital underutilization.”
Closing this gap between potential and realized funding will be the defining challenge for emerging ecosystems as they navigate a turbulent global landscape.
Oil Updates — crude falls as Iran affirms commitment to nuclear treaty
LONDON: Oil futures fell slightly on Friday after Iran reaffirmed its commitment to nuclear non-proliferation, while major producers from the OPEC+ group are set to agree to raise their output this weekend.
Brent crude futures were down 49 cents, or 0.71 percent, to $68.31 a barrel by 11:31 a.m. Saudi time, while US West Texas Intermediate crude fell 41 cents, or 0.61 percent, to $66.59.
Trade was thinned by the US Independence Day holiday.
US news website Axios reported on Thursday that the US was planning to meet with Iran next week to restart nuclear talks, while Iran Foreign Minister Abbas Araqchi said Tehran remained committed to the nuclear Non-Proliferation Treaty.
The US imposed fresh sanctions targeting Iran’s oil trade on Thursday.
Trump also said on Thursday that he would meet with representatives of Iran “if necessary.”
“Thursday’s news that the US is preparing to resume nuclear talks with Iran, and Araqchi’s clarification that cooperation with the UN atomic agency has not been halted considerably eases the threat of a fresh outbreak of hostilities,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.
Araqchi made the comments a day after Tehran enacted a law suspending cooperation with the UN nuclear watchdog, the International Atomic Energy Agency.
OPEC+, the world’s largest group of oil producers, is set to announce an increase of 411,000 bpd in production for August as it looks to regain market share, four delegates from the group told Reuters.
Meanwhile, uncertainty over US tariff policies resurfaced as the end of a 90-day pause on higher levy rates approaches.
Washington will start sending letters to countries on Friday specifying what tariff rates they will face on goods sent to the US, a clear shift from earlier pledges to strike scores of individual trade deals.
President Trump told reporters before departing for Iowa on Thursday that the letters would be sent to 10 countries at a time, laying out tariff rates of 20 percent to 30 percent.
Trump’s 90-day pause on higher US tariffs ends on July 9, and several large trading partners have yet to clinch trade deals, including the EU and Japan.
Separately, Barclays said it raised its Brent oil price forecast by $6 to $72 per barrel for 2025 and by $10 to $70 a barrel for 2026 on an improved outlook for demand.
EV maker Lucid’s quarterly deliveries rise but miss estimates
- Lucid delivered 3,309 vehicles in the quarter ended June 30
LONDON: Electric automaker Lucid on Wednesday reported a 38 percent rise in second-quarter deliveries, which, however, missed Wall Street expectations amid economic uncertainty.
Demand for Lucid’s pricier luxury EVs have been softer as consumers, pressured by high interest rates, shift toward cheaper hybrid and gasoline-powered cars.
Lucid delivered 3,309 vehicles in the quarter ended June 30, compared with estimates of 3,611 vehicles, according to seven analysts polled by Visible Alpha. It had delivered 2,394 vehicles in the same period last year.
Saudi Arabia-backed Lucid produced 3,863 vehicles in the quarter, missing estimates of 4,305 units, but above the 2,110 vehicles made a year ago.
The company stuck to its annual production target in May, allaying investor worries about manufacturing at a time when several automakers pulled their forecasts due to an uncertain outlook.
US President Donald Trump’s tariff policy has led to a rise in vehicle prices as manufacturers struggle with high material costs, forcing them to reorganize supply chains and produce domestically.
Lucid’s interim CEO, Marc Winterhoff, had said in May that the company was expecting a rise of 8 percent to 15 percent in overall costs due to new tariffs.
The company’s fortunes rest heavily on the success of its newly launched Gravity SUV and the upcoming mid-size car, which targets a $50,000 price point, as it looks to expand its vehicle line and take a larger share of the market.
Deliveries at EV maker Tesla dropped 13.5 percent in the second quarter, dragged down by CEO Elon Musk’s right-wing political stances and an aging vehicle line-up that has turned off some buyers.
