Former Nissan Motor executive Greg Kelly’s trial in a Tokyo court came to an end Thursday when the judge issued a verdict of guilty of one count of hiding Carlos Ghosn’s pay from financial regulators – but immediately suspended Kelly’s six-month sentence.
Barring some swift move by the prosecution to appeal the verdict, Kelly can leave Tokyo more than three years after his arrest and return to his home in Tennessee.
The ruling found that while Kelly bore no responsibility for the lion’s share of 9.3 billion yen ($80.5 million) in never-paid compensation to Ghosn – that amount was never approved by Nissan’s board and couldn’t have been paid without board approval – he nevertheless was aware of one year in which compensation had been concealed from regulators. The total for that year (2017) was 1.7 billion yen or $14.6 million at the current exchange rate.
The court found that most of the blame for allegedly concealing eight years of “income” fell on Ghosn himself and Toshiaki Ohnuma, who headed Nissan’s secretariat and who oversaw details of Ghosn’s compensation. Ghosn of course couldn’t have paid himself, and Ohnuma didn’t have authority to make policy for the company.
Flawed ruling
We’ve seen the evidence and believe that the chief judge, Kenji Shimotsu, got it wrong. We will probably never learn whether he caved to pressure from the Tokyo prosecutors’ office in making his split decision or just didn’t understand the facts as they were presented in his court.
According to our sources, Ohnuma alleged that he had informed Kelly of the undisclosed compensation scheme, thus making Kelly an accessory to the crime. The problem is that the judge knew, based on testimony during the trial, that Kelly had advised Ghosn in February 2010 that if he reduced his pay, as Ghosn did and as the chart shows, he couldn’t reclaim it.
Also supporting Kelly’s claims are other key documents presented during the trial – including four post-retirement compensation proposals (two in 2011, one in 2013 and a fourth in 2015, the latter two co-signed by Kelly and Nissan’s future CEO, Hiroto Saikawa) – plus the Nada interview in July 2019.
Moreover, we were told that Kelly’s name did not appear on any documents presented at the June 2018 meeting. Thus, it was entirely their word, Ohnuma’s and Nada’s, against his, Kelly’s – keeping in mind that five months later in October both Ohnuma and Nada would confess to committing unspecified financial crimes in order to avoid prosecution.
The judge also knew, we now can say based on a document shown in a TV Tokyo report , that on May 24, 2018, Hari Nada received the scenario charts, which were discussed at length during the trial and which included plans to get rid of Ghosn and Ghosn’s allies.
And it became a national scandal, covered by all major media organizations, when in September 2019 Hiroto Saikawa was forced to step down from the CEO’s position for receiving “backdated” (backdated by Ohnuma) shareholder appreciation rights income, giving himself a generous windfall. Other Nissan executives, including Nada, also received extra-large bonuses.
In addition to the Kelly verdict, the court levied against Nissan a fine of 200 million yen ($1.73 million) for its failure to disclose Ghosn’s pay.
Regardless of the verdict, Kelly’s name may eventually be cleared – if not in Japan (Kelly’s lead lawyer, Yoichi Kitamura, has indicated that he plans to appeal the ruling) then back in the US once he and his wife, Dee, are settled in their home in the Nashville suburb of Brentwood.
Roger Schreffler is a former president of the Foreign Correspondents’ Club of Japan.