It was an unseasonably cold autumn day three and a half years ago when Greg Kelly, one of the most respected executives at Nissan and a trusted advisor to chairman Carlos Ghosn, received a phone call from Hari Nada, who headed the CEO’s office, urging him to return to Japan the following Monday, November 19, 2018, for a Tuesday meeting at the automaker’s Yokohama headquarters.
There was no meeting. Nada’s call was a ruse to lure Kelly back to Japan, where he would become collateral damage in an intricately planned corporate coup to remove Ghosn and key Ghosn allies from Nissan management. Nada and the prosecutor knew that Kelly was scheduled for urgently needed spinal fusion surgery in early December but would not be able to return to his home in Tennessee for the surgery.
Kelly, 62 at the time, suffered at the hands of Nissan and his Japanese captors. On top of his health problems, he lost his post as a Nissan director. His reputation was sullied, based on the flimsiest of allegations: The Tokyo prosecutors’ office charged him with conspiring to enrich Ghosn (but not himself) by helping to change eight years of official financial reports – all of them written in Japanese, which he doesn’t read, write or speak.
Before his ordeal finally came to an end in early March, Kelly would spend 1,200 days away from most of his family and friends. Although he initially faced a 15-year prison term for that alleged crime that he couldn’t have committed, the Tokyo District court acquitted him on March 3, 2022, on seven of the eight fiscal years under consideration. He was found guilty of involvement with only a small fraction of the 9.3 billion yen of income ($73 million at the current exchange rate) that Nissan and the prosecutor had accused him and Ghosn of concealing.
Both Kelly and the Tokyo prosecutors’ office are appealing the ruling. Kelly had the full support of the US government, including both the State Department and the White House. The US ambassador to Japan, Rahm Emanuel, drove him to the airport in Tokyo when he left Japan on March 7. The former US ambassador who’s now a US senator from Tennessee, William Hagerty, met him upon his arrival in Nashville.
We spoke to Kelly and his wife, Dee, both before and after their return to the US. Greg Kelly opened up about his experiences, including living as a prisoner in Japan’s notorious “hostage justice” system. From their home in the Nashville suburb of Brentwood, Kelly confided, “Never a day went by that I didn’t think about the odds: that the conviction rate in Japan, even though I was innocent, is more than 99%.”
Now 65, Kelly told us about his reception at Nashville International Airport where family and friends, including former Nissan colleagues, as well as a US senator greeted him.
“I don’t like the limelight,” he reflected, ever polite and unassuming, adding that “I am not a public person. I got caught in a situation the public had an interest in. But to be escorted to the airport in Tokyo by the US ambassador, and then met here in Tennessee by a US senator was quite humbling.” Both Emanuel and Hagerty “gave us hope,” he said.
Dee was with her husband in Tokyo for all but the first six weeks of the ordeal. They lived together in a small apartment in the central part of the city. They were isolated except for a small coterie of trusted friends because Greg’s bail agreement prohibited him from having any contact with former Nissan colleagues – meaning everyone he had worked with for 30 years.
He also suspected – and we’ve confirmed – that Nissan had hired a team of investigators to keep tabs on both his and Ghosn’s movements around Tokyo. Regular reports were distributed from the CEO’s office (Nada’s office) and included, in addition to Ghosn and Kelly and their families, Renault executives visiting from France and even journalists. The reports are real and were distributed internally by Nissan’s head of security, Rui Kamei.
“It’s shocking, frankly,” said Kelly. “We didn’t know for sure that we were being followed, but of course we sensed it.”
A by-the-books lawyer, according to people who know him, Kelly still isn’t sure why he was singled out by Nada for arrest and criminal prosecution. Nada, apart from being one of Kelly’s and Ghosn’s main accusers, had also entered into a plea agreement with the prosecutors’ office to avoid prosecution himself.
Kelly suspects Nada’s actions stemmed from Renault’s decision to force the integration of the two main Alliance partners, Renault and Nissan: “It came out at trial that an early 2018 resolution by Renault’s board instructing Ghosn to merge Nissan and Renault triggered the coup.”
That resolution also made it clear that if Ghosn failed to merge the operations he risked losing his contract as Renault CEO the following June.
Although it’s still a painful subject, Kelly shared details about how he was lured to Japan on false pretenses and held captive. He arrived at Tokyo’s Narita International Airport in late afternoon November 19, 2018 local time. He entered a waiting Nissan van, arranged for him by Nada.
On the way to his hotel in Yokohama, the van pulled over on the side of the road. Officials from the Tokyo prosecutors’ office entered and commandeered the vehicle, taking Kelly to their office in Tokyo, where he was arraigned. They then moved onward to the Tokyo Detention House, a maximum security prison despite its innocuous-sounding name, where he was made to strip in front of his captors and put on his light blue prison outfit.
Kelly said he was held in solitary confinement for the next 37 days in the dead of winter in an unheated cell, initially without winter clothing. On a number of nights, temperatures fell into the 30s Fahrenheit.
The Nelson Mandela Rule passed by the United Nations General Assembly sets a 15-day limit for solitary confinement – mostly for violent criminals, which Kelly certainly was not. Anything beyond that is considered torture. Ghosn was held for 109 consecutive days following his first arrest and 21 after his second in April 2019.
Lights were on in his cell 24 hours, 7 days per week, Kelly revealed. The prosecutors daily interrogated him for four to six hours a day, all without his lawyer present. When he wasn’t being interrogated, he would have to sit in the corner of his cell, legs stretched forward. He was not allowed to stand up and walk around for exercise.
On weekends and holidays, he was not allowed outside his cell for any “open-air” exercise on the roof of the prison. He was permitted only two baths per week. He was not able to communicate with his US lawyers or even his wife.
In detention, Kelly repeatedly requested medical attention for his spinal condition. In late December the prosecutor opposed his bail request knowing that it would further delay his surgery.
He would finally be granted bail on Christmas 2018, and his spinal fusion surgery occurred a month after it was originally scheduled.
Kelly referred to his arrest as “shock and awe,” and confided that his “darkest” moments were when his trial date was repeatedly pushed back in a system “designed to convict” with a 99.4% conviction rate.
“We lost three and a half years of our lives,” he reflected. “Losing three years is not like losing three months. It is still surreal to me to be back home and to be able to visit my family and friends, including my two grandsons.”
The family recently added a baby girl, a granddaughter Kelly met for the first time several weeks ago.
It shouldn’t go unnoted that in addition to excellent lawyering – Kelly retained one of Japan’s best defense attorneys, Yoichi Kitamura – three US senators from states in which Nissan produces cars, two from Tennessee and one from Mississippi, had his back throughout his ordeal. All decried his brutal treatment in Japan, while pointing to his innocence.
Hagerty, Tennessee’s junior senator, in endorsing Rahm Emanuel to be the US ambassador last fall, characterized Kelly’s treatment as “barbaric,” “cruel” and “inhumane.” Immediately after the verdict, he added: “What should have been a corporate boardroom decision landed [Kelly] in the Tokyo prosecutors’ office. Greg is innocent of the charges laid against him.”
Senators Marsha Blackburn and Roger Wicker concurred. “Greg and Dee have endured an ordeal that has spanned years of false allegations and confinement to Japan,” said Blackburn, Tennessee’s other senator, while Mississippi’s Wicker summed up: “Greg has essentially been held against his will on baseless charges for three years. His treatment was cruel and deplorable.”
While Kelly hesitated to talk about his case and what steps his legal team are contemplating, including possibly seeking damages against Nissan in the US, he wanted to make sure that one basic fact is understood.
“There was no crime,” he stressed. “Ghosn was never paid anything, the board never decided to pay him anything and the only way he could have been paid is with board approval.
“The record shows clearly that Ghosn knew this, Saikawa-san knew this [Hiroto Saikawa was CEO at the time of the coup], the head of human resources, Arun Bajaj, knew it. So did Nissan’s former general legal counsels in North America and Japan, Scott Becker and Ravinder Passi.
“Hari [Nada] knew it. The compensation consultant we commissioned, Peter Gundy [formerly of Towers Watson & Co], knew it. And the lawyers at Latham & Watkins knew it because they drew up two of the key post-retirement employment documents.”
Kelly added: “We all wanted to retain a very talented executive. It was no more complicated than that.”
Kelly then went on to discuss the “what-ifs” if Ghosn hadn’t been ousted.
“We created something special,” he declared. “What happened is a tragedy because the Alliance today should be Nissan, Renault, Mitsubishi – and Fiat Chrysler. That was Ghosn’s plan.
“And just imagine how strong Nissan would be today if it was part of a group whose North American lineup included Dodge trucks and Jeep.
“And imagine if executives like José Muñoz and Daniele Schillaci were still part of the team,” said Kelly, who headed Nissan’s human resources operation for nearly half a decade.
“Of course new people have risen up, people like Ashwani Gupta (now COO) and Ivan Espinosa (vice president of product planning), but we assembled a talented and diverse team, coming from Italy, Spain, Germany, France, the UK and many other countries, who worked alongside our Japanese management team.
“Carlos was a magnet for drawing talent. And whatever his critics might want to say about him, people wanted to work for him.”
Schillaci is currently CEO of Brembo, a European auto parts supplier, while Muñoz is COO of Hyundai Motor Co.
Of nearly a dozen top-level executives who left Nissan in the shakeup that followed Ghosn’s arrest, Muñoz is arguably the biggest loss. Now running Hyundai’s business in North America, Europe, India and the Middle East, Muñoz, since leaving the Japanese automaker in January 2019, has overseen a net 3 percentage point increase in market share in head-to-head competition with Nissan in the all-important US market.
Muñoz, according to our sources, was ready to step in and run Nissan – a provisional succession plan was in place – when the Spanish and US ambassadors warned him not to return to Japan for he might be next on Nissan’s and the Tokyo prosecutor’s hit list.
Bajaj, Becker, Gundy, and Passi for various reasons, including fears for their personal safety, couldn’t or wouldn’t travel to Japan to testify on Kelly’s behalf. Yet all possessed information that would have exonerated him.
Bajaj and Passi, in particular, endured police raids on their homes in front of their children. Passi, as Nissan’s former top lawyer, had blown the whistle on corruption in Nissan management.
Back to Kelly: Nissan, after falsely accusing Kelly and being linked to concealing exculpatory evidence in his trial, is now seeking damages from him – 1.4 billion yen or $10.8 million – in a civil suit in Japan. Multiple sources have characterized the automaker’s attempt to squeeze money from Kelly as vindictive.
Kelly’s US lawyer, Jamie Wareham, expressed their sentiment. “What a barbaric and disgusting turn of events,” he declared. “First, they decided to destroy two Westerners to avoid two failed Japanese companies [Nissan and Mitsubishi Motors] from becoming French. Then they tortured both Westerners for more than 150 days, and now they seek to regain inexorably lost face having had their asses handed to them at trial.”
A veteran correspondent for Wards Automotive, which carries a different version of this exclusive-interview story, Roger Schreffler is a former president of the Foreign Correspondents’ Club of Japan. Follow him on Twitter @RogerSchreffler