Japanese prosecutors seek two years in prison for former Ghosn aide Greg Kelly

Messrs. Ghosn and Kelly “acted to hide income through 2018,” said prosecutor Yukio Kawasaki. “Governance failure is a deep problem for such a socially important company.”

The sentencing request came during prosecutors’ final arguments in the case in Tokyo District Court. Mr Kelly says he is innocent, and the court’s three-judge panel is expected to issue a verdict next year. If he is found guilty, the court will also decide on his sentence.

Mr Kelly, 65, was charged with violating a rule governing the public disclosure of executive pay. Under the law, the maximum sentence in Mr Kelly’s case would be 15 years, but prosecutors said two years would be appropriate.

Mr Kawasaki said prosecutors would have sought a longer sentence, but noted that Mr Kelly has been in Japan for nearly three years since his arrest. His trial began a year ago

Nissan was also charged as a company and is not disputing the allegations. Prosecutors recommended that Nissan pay a fine equivalent to about $1.8 million.

The Disclosure Regulation, which took effect in 2010, required companies to disclose the salary of any executive in the year the salary was set. Prosecutors have alleged that Mr. Ghosn, the chief executive and later chairman of Nissan, arranged for Mr. Kelly to defer nearly half of his compensation each year until after his retirement.

During the trial that began in September 2020, prosecutors produced documents and testimony from a Nissan employee named Toshiaki Ohnuma. Every year, Mr Ohnuma creates a document dividing Mr Ghosn’s salary into two categories: paid and deferred remuneration. Prosecutors allege that Mr. Kelly knew about the deferred remuneration and should have made sure Nissan included it in the company’s annual securities filings.

“Kelly had an important and essential role in these events. He was essential in carrying out these acts, and Ghosn had the confidence,” said Mr. Kawasaki, the prosecutor.

Mr Kelly has said he never saw a document labeled deferred remuneration or any such calculation until June 2018, when Mr Ohnuma presented him with a number calculated by Mr Ghosn.

Mr Kelly said he was working on possible ways to pay Ghosn after retirement to prevent the executive from going to work elsewhere, but said nothing was settled and needed to report publicly. is not needed.

Mr. Kelly also testified that the total amount of post-retirement salary for Mr. Ghosn remained the same between 2011 and 2018 – around $90 million to $100 million. Defense lawyers say this contradicts prosecutors’ arguments, because if Mr Ghosn’s proposed post-retirement pay was to reflect deferred compensation for each year’s work as an executive, that figure Should have increased every year, should not remain the same.

Mr Ghosn, who has been living in Lebanon after fleeing Japan in December 2019, has said documents referring to deferred compensation were only a way of recording what he was worth to Nissan and not binding. He says that he is innocent and runs away as he did not get a fair trial.

Both sides in the lawsuit agree that Mr Ghosn cut his compensation by nearly half when the disclosure regulation went into effect because he feared a backlash from the public and the French government, which is the largest in Nissan’s coalition partner, Renault SA. Large shareholder. The Parties also agree that Mr. Ghosn never received the money described in the documents as deferred remuneration.

Mr. Kelly’s US-based attorney, Jamie Wareham of Fried, Frank, Harris, Shriver & Jacobson LLP, called the Japanese case a sham and said that it was at the will of Nissan officials and government officials to prevent a merger between Nissan. The allegations were motivated. and Renault.

This story has been published without modification to the text from a wire agency feed