TOKYO -- Japan's markets watchdog said it has recommended that Nissan be fined about 2.4 billion yen ($22 million) over the underreporting of former Chairman Carlos Ghosn's compensation.
The fine would cover the four financial years from April 2014 to March 2018, markets watchdog the Securities and Exchange Surveillance Commission (SESC) said.
Ghosn was arrested in Tokyo in November last year over allegations of financial misconduct, including understating his salary by around 9.1 billion yen over a period of nearly a decade and temporarily transferring personal financial losses to the books of Nissan. He has denied wrongdoing and is free on bail as he prepares for a trial set to start next year.
Due to the statute of limitations, Nissan is not liable for underreporting before the financial year starting April 2014, an SESC official told a press briefing. Japan's financial regulator the Financial Services Agency will make a final decision on the fine.
A 2.4 billion yen fine would be the second largest ever imposed in Japan for false reporting in a corporate financial statement, behind a 7.3 billion yen fine imposed on Toshiba in 2015, according to the SESC.
Nissan said in a statement that it was taking the SESC's recommendations seriously.
"We express deepest regret to stakeholders for any trouble caused. We will continue efforts to strengthen governance and compliance including ensuring accuracy of corporate information disclosure," the automaker said.
The SESC acknowledged false reporting by Nissan based on its investigation, the official told reporters.
Nissan's new CEO, Makoto Uchida, pledged on his first day in the role on Dec. 2 to repair profitability and said setting realistic targets would be key to that goal, as the automaker seeks to make a clean break from Ghosn's leadership.
Reuters in June cited a source saying Nissan would be fined up to 4 billion yen and that it may receive a reduced fine of around 2.4 billion yen if the automaker filed documentation to the SESC before a formal investigation begins.
Nissan is struggling to chart a path to growth after announcing a plunge in profitability to decade lows and 12,500 job cuts, and replacing top management.
In September, the U.S. Securities and Exchange Commission settled with Nissan and Ghosn over claims that they failed to disclose more than $140 million in pay. Nissan will pay the U.S. regulator $15 million while Ghosn was hit with a $1 million penalty as part of the settlement.
Reuters and Bloomberg contributed to this report