Former Chairman of Nissan Ghosn Case Kelly 15th First Trial September 15 5:26
The first trial of former President Greg Kelly and Nissan as a corporation, which is charged with describing the former chairman’s remuneration in a securities report as an accomplice to former Chairman Carlos Ghosn of Nissan Motor Co., Ltd., will be held in Tokyo District Court on May 15. As Ghosn’s former president flees abroad and is absent, a series of case trials will be held for the first time.
Greg Kelly, 64, a former representative director of Nissan, is accused of violating the Financial Instruments and Exchange Act along with Nissan as a corporation, accusing him of conspiring with Carlos Ghosn, 66, a former chairman who fled to Lebanon in the Middle East, to document the former chairman’s remuneration for eight years until fiscal 2017 that was less than 9.1 billion yen in accordity with his securities report.
Former CEO Kelly will plead not guilty entirely, saying that “there was no under-description of the remuneration and he was not in a position to determine the remuneration of the former chairman,” and Nissan as a corporation will not contest the charges.
Prosecutors argue that the former chairman postponed the payment of more than 9.1 billion yen, which he did not state in the report, and in the trial, whether the compensation allegedly deferred had been finalized and whether Kerry’s former representative director was involved in the review is expected to be a point of contention. With the escape of former Chairman Ghosn, kelly and Nissan will be separated from each other for trial, and a series of case trials will be held in Japan for the first time.
More than 70 hearing dates have already been set until July next year, and nissan’s former secretary general, former president Keiji Nishikawa, who has responded to a plea deal with prosecutors, is expected to appear in court as a witness. The first trial will be held at Tokyo District Court from 10:30 a.m. on the 15th.
What is Kelly’s former CEO?
Greg Kelly, 64, joined a Nissan affiliate in the United States in 1988 after graduating from a university in the United States, where he worked as a lawyer at a law firm.
Since 2008, he has been an executive officer at Nissan’s headquarters and was a member of the CEO Office, which was directly supported by former Chairman Ghosn, and was known as an aide to former Chairman Ghosn.
From 2012, he assumed the position of Representative Director of Nissan, and at the time of his arrest, he remained as a part-time representative director and usually lived in the United States.
At the time of his arrest, there were three representative directors: Former Chairman Ghosn, former President Nishikawa, and former CEO Kelly. He was arrested in November with Ghosn and released on bail about a month later.
Shortly after he was released on bail, he said, “It will be revealed in court that I am innocent. After being found not guilty, my honor has been restored and I hope to return to my family as soon as possible.”
However, one of the conditions for bail prohibits him from traveling abroad, and Kerry’s former representative director has been in Japan for nearly two years.
I live with my wife in a restricted residence in Tokyo, and I can’t meet my family in the United States. He has been preparing to plead not guilty in court by reading court materials and actively participating in procedures to sort out the issues that will be held in court.
In an interview with NHK ahead of his first trial, Kelly pleaded not guilty to “I am not violating any japanese regulations,” and then told Ghosn, “I wanted him to testify in court. We must continue to take responsibility for our decision to flee.”
As for how he felt about the trial, he said, “Former Chairman Ghosn was a very good manager and wanted Nissan’s independence to be protected from Renault. In court, I would like to talk about why it was important for Nissan to maintain a long relationship between Nissan and its former chairman.”
What is the indictment of the case?
Greg Kelly, 64, is accused of violating the Financial Instruments and Exchange Act by conspiring with former Chairman Carlos Ghosn, 66, to document a total of 9.1 billion yen less than Ghosn’s compensation in an eight-year securities report until FY2017.
Nissan as a corporation is also charged with the same crime. Meanwhile, Ghosn, the former chairman, has been charged with special disobeyment for repatriation of some of the money he had spent from Nissan by Oman’s distributors, in addition to charges of inequity, but there is no prospect that the trial will be separated and opened in response to his escape to Lebanon.
In this case, only cases with under-remuneration will be heard.
The issue of the trial and the claims of both sides
[The issue of the trial]
In this case, prosecutors argue that former Chairman Ghosn has postponed the receiving of more than 9.1 billion yen out of an eight-year total of approximately 17 billion yen in compensation to avoid revealing his own high remuneration. Executive compensation is required to be disclosed when the amount is revealed even if it has not actually been paid, and the issue of the trial is whether the compensation that former Chairman Ghosn postponed to receive after he leaves office has been finalized, and whether Mr. Kerry was involved in deferring compensation or considering future payment methods.
[Both sides’ claims]
Prosecutors argue that it is clear that the payment of deferred compensation was decided due to the existence of multiple agreement documents signed by Ghosn’s former chairman.
As for Kelly’s former CEO, he will consider ways to ensure that he pays the deferred compensation at the direction of former Chairman Ghosn, and insists that he has signed a proposal for a contract to pay compensation after retirement.
On the other hand, former CEO Kelly acknowledged that he had signed the draft contract, but the contract is not a post-payment of executive compensation in return for work such as a consulting officer who will take office after retirement. It is a policy to insist that the purpose was to keep the former chairman of Ghosn together to protect Nissan from Renault.
In addition, the defense argues that even if the deferred executive compensation is not disclosed, it will not be subject to criminal penalties, but will remain in administrative dispositions such as surcharges.
[Evaluation of “judicial transactions” is also note]
One of the major features of this case is that in return for prosecutors not prosecuting nissan’s former secretary general and two others, a “judicial transaction” was used to obtain evidence such as statements and documents.
Ghosn’s lawyers had claimed last year that “judicial transactions are illegal for the purpose of losing the former president” before fleeing.
The former secretarial office chiefs who have responded to the judicial deal are scheduled to appear as witnesses, and attention will also be paid to how the court evaluates the credibility of the testimony in court.
Experts “divid guilty and not guilty whether the reward has been confirmed”
Tomoyuki Mizuno, a former criminal judge and professor at Hosei University, said of the trial, “I think this is the first time that a case in which the compensation of a top executive of a large company is firmly stated in a securities report or whether it is a false statement is contested. It also attracts a lot of attention as a trial for cases where judicial transactions have been applied.”
On that basis, he said, “I think whether or not the remuneration to be paid to former President Ghosn in the future has been fixed will be the basis for the conviction and innocence. It’s very difficult to decide whether unpaid compensation was finalized at the time or just an appointment, and it’s necessary to make a comprehensive decision on a number of witnesses and documents.”
As for the impact of the judicial transaction on the case, he said, “Everyone who responds to the judicial transaction is facing a certain direction, so just matching the content of the testimony in court does not mean that they can be trusted immediately. The key is whether there is evidence to support the testimony or whether the defendant can stand up to the defendant’s objections and provide a reasonable explanation.”
The history of the case and the movement until the first trial
[Sudden arrest and criticism from abroad]
Ghosn and Kelly were arrested by the Tokyo District Attorney’s Special Investigation Department in November.
It was suspected of violating the Financial Instruments and Exchange Act by describing Ghosn’s compensation less in the securities report.
The sudden arrest shocked the world. If the two men deny the charges and continue to be detained, the foreign media will pay attention to the state of Japan’s criminal justice system.
There has been growing criticism that human rights are not guaranteed, such as the detention of suspects for a long period of time and the indity of lawyers in investigations.
Kelly was released on bail after being detained for 37 days, and Ghosn was arrested on suspicion of special disobeying him, totaling 130 days in detention.
During his bail in March last year, with a large number of reporters, including foreign media, waiting at the Tokyo Detention Center, former president Ghosn disguised himself as a worker and surprised the world.
[Former President Ghosn escapes]
After his bail, Ghosn visited a lawyer’s office in Tokyo every day to prepare for trial.
However, at the end of last year, about eight months after his bail, he acted in surprise.
He got into a private jet heading from Kansai Airport to Turkey in a large case and set out of the country. He escaped to Lebanon, breaking the terms of his bail, which prohibited him from traveling abroad.
Ghosn, the former chairman, said at a press conference after his escape that “there was no hope of a fair trial in Japan” and insisted on justifying the escape. In response, the Special Investigation Department has issued an arrest warrant on suspicion of violating the Immigration Control Act, saying that Ghosn, the former chairman, illegally leaves the country without being examined for immigration.
Two former members of the U.S. Special Forces were arrested by U.S. law enforcement in May for helping them leave the country, and a U.S. court has indicated that they will allow their handover to Japan.
[The trial is separated]
With Ghosn’s escape, there is no prospect of a trial for the former president.
Nissan, a former representative director of Kerry and a corporation, has reached its first trial, separate from the trial of former chairman Ghosn.