Photo/IllutrationNissan Motor Co.’s head office in Yokohama (Saki Rin)

Prosecutors are considering investigating Nissan Motor Co. over its five-year failure to uncover suspected income under-reporting by Chairman Carlos Ghosn, sources said.

Ghosn and Greg Kelly, a representative board member, were arrested on Nov. 19 on suspicion of violating the Financial Instruments and Exchange Law. The law stipulates penal provisions for individuals as well as for companies if their employees have broken the law in the course of business operations.

If a company is found guilty, it faces a maximum fine of 700 million yen.

Investigators are looking at Nissan’s criminal responsibility considering the long period of the suspected under-reporting as well as the huge amount, about 5 billion yen ($44.2 million), involved.

Prosecutors said that between fiscal 2010 and fiscal 2014, Ghosn and Kelly conspired to falsely report Ghosn’s income at about 4.987 billion yen in Nissan’s annual securities reports when in fact he received about 9.998 billion yen.

The arrests came after prosecutors received cooperation from senior Nissan employees in a plea-bargaining arrangement. A number of senior employees who worked under Ghosn, including at least one corporate officer, were part of the plea-bargaining arrangement in which their criminal responsibility will be reduced in exchange for their cooperation, the sources said.

Kelly instructed the corporate officer and other Nissan officials to make the false entries on the company’s annual securities reports, the sources said.

Nissan officials said they believe Ghosn used the under-reported 5 billion yen for private purposes by dipping into Nissan’s investment funds and general expenses.

Subsidiaries of the automaker also bought expensive homes in Rio de Janeiro and Beirut for use by Ghosn. The cost of those purchases ran to several billions of yen.

According to sources, Nissan officials provided information to prosecutors about the home purchases because they judged that those expenditures should have been included as part of Ghosn’s remuneration in the annual securities reports.