An American lawyer on trial in Japan on charges related to reporting of former Nissan Chairman Carlos Ghosn’s compensation asserted his innocence Wednesday, testifying he acted legally and in Nissan’s best interests.
Greg Kelly, a former executive vice president at Nissan Motor Co., told the Tokyo District Court he was worried Ghosn might job-hop after taking a big pay cut in 2010, when Japan began requiring disclosures of high executive pay.
“He became a retention risk,” Kelly said in response to questioning by his chief defense lawyer, Yoichi Kitamura.
“We were fortunate to have a CEO as talented as Carlos Ghosn,” he said.
Starting in 2010, Ghosn’s annual pay was cut by about half, or 1 billion yen ($10 million). Company officials had worried about potential public criticism since big executive paychecks are rare in Japan. After the pay cut, Ghosn was making considerably less than his counterparts at US and European automakers.
Ghosn and Kelly were arrested in late 2018. Ghosn was charged with underreporting his compensation and with breach of trust. But he fled to Lebanon while out on bail. Kelly is facing charges of conspiring with Ghosn to underreport his pay.
A key focus of the trial is whether the unpaid money was ever decided upon. Ghosn, who led Nissan for two decades, says he is innocent and the money was not decided upon or paid.
Testimony and documents presented during the trial show Kelly sought ways to compensate Ghosn through possible post-retirement consultancy fees and a deal paying him to leave for a rival company, known as a “non-compete” agreement.
Prosecutors says they’re confident about their cases against both Ghosn and Kelly.
During Wednesday’s hearing, Kelly said that before the trial began he had never seen detailed calculations of Ghosn’s potential pay, which were handled by another Nissan executive who reported directly to Ghosn.
Kelly worked as a labor and environmental lawyer in the U.S. before joining Nissan in 1988. He testified that his exchanges with the executive, Toshiaki Ohnuma, tended to be short and superficial because Ohnuma’s English was limited and Kelly doesn’t speak much Japanese.
Ohnuma took a plea bargain and testified last year for the prosecution, outlining how he worked on Ghosn’s “unpaid compensation.”
If convicted, Kelly faces up to 15 in prison. The conviction rate in Japan is higher than 99%. A verdict isn’t expected for months.
Yokohama-based Nissan has sunk into losses since the Ghosn scandal surfaced, and the pandemic has added to those woes. Its new chief executive, Makoto Uchida, has promised a comeback.
