Greg Kelly, Nissan’s former legal head accused of conspiring to conceal the extent of Carlos Ghosn’s pay, is set to walk free after he was found guilty but was handed a suspended prison sentence on Thursday.
The trial of Kelly – which has run for 18 months and involved tearful court testimonies, descriptions of Ghosn’s tyrannical leadership and precedent-setting legal debate – has been among the most closely watched corporate cases in Japan in decades, even after its central figure escaped to Lebanon in 2019.
Prosecutors had sought a two-year prison sentence, accusing Kelly, Ghosn and Nissan of violating Japanese law by failing to declare ¥ 9.3bn ($ 80mn) in deferred remuneration that her former chair was set to receive over an eight-year period.
The court found Kelly not guilty for most of that period and gave him a six-month prison sentence for only the fiscal year ending in March 2018, concluding that Kelly was aware of the undisclosed compensation for that final year.
With the sentence suspended for three years, the 65-year-old American lawyer will likely return to his home in Tennessee with his wife in the next few days, unless prosecutors appeal against the ruling. An appeal would complicate an ordeal that has lasted since Kelly was lured to Japan for a meeting and arrested on the same day as Ghosn in late 2018.
Ghosn has denied the multiple financial misconduct charges he faced and described Japan’s legal system as “rigged”.
More than 99 per cent of Japanese criminal cases that reach trial end in convictions. But legal experts said the ruling did not represent a straightforward victory for prosecutors, who have been under enormous pressure after taking on a case that emerged from a secret internal investigation at Nissan and which Ghosn’s supporters believe was politically motivated.
The court sided with prosecutors in concluding that Ghosn and Nissan had falsely stated his pay in financial documents. Kenji Shimotsu, the chief judge, added: “Ghosn was aware of the unpaid remuneration that should be disclosed.”
However, the judges also raised questions over a case in which prosecutors had relied heavily on testimonies that arose from plea bargains made with important Nissan figures. The plea bargain itself has only recently been introduced in Japan, and this case was its highest profile test.
Shimotsu said the testimony of a crucial witness who signed a plea bargain was “fraught with danger that he was making statements that conformed to the prosecutors’ wishes”.
The trial has divided legal scholars over the interpretation of Japanese disclosure rules on executive remuneration. It has also drawn intense scrutiny for the profound effect it would have on the way corporate crime is pursued by Japan’s justice system and how companies handle executive pay.
Yasuyuki Takai, a prosecutor-turned-defense lawyer, said the trial had highlighted the complexity in handling plea bargain deals. “The case is also meaningful if this trial can set the basis for clearer disclosure rules on executive compensation,” he added.
Kelly, who has worked at Nissan for 30 years, has consistently maintained his innocence, saying the carmaker never made a legally enforceable contract to pay Ghosn the disputed remuneration.
He claimed Ghosn was never paid anything beyond his declared salary, and any additional remuneration that may have been discussed was meant to prevent his former boss from being poached by rivals but was not part of a formal agreement.
The court also ordered a ¥ 200mn ($ 1.7mn) fine for Nissan, which has not disputed the charges leveled against the company.