clearn.png
Tuesday September 22nd, 2020 3:01AM

Japan begins trial of Nissan, ex-executive over Ghosn's pay

By The Associated Press
Related Articles
  Contact Editor

TOKYO (AP) — The financial misconduct trial of former Nissan executive Greg Kelly began Tuesday with Kelly saying he committed no crimes and was only trying to keep his star boss Carlos Ghosn from leaving.

The charges being heard at Tokyo District Court center around Kelly’s alleged role in failing to report to Japanese authorities the future compensation of Ghosn, who led Nissan Motor Co. for two decades.

Japanese prosecutors outlined allegations of what they said was a complex and clandestine scheme to pay Ghosn more than the amount the company had reported as compensation. Kelly denied the allegations and said everything that was done was intended to keep Ghosn, whom he called an “extraordinary executive,” at Nissan.

“This was all in the best interests of Nissan,” Kelly said, reading from a statement.

“I deny the allegations. I was not involved in a criminal conspiracy,” said Kelly, whose trial opened on his 64th birthday.

Ghosn was arrested in late 2018 at the same time as Kelly but jumped bail and fled to Lebanon late last year. Since Lebanon has no extradition treaty with Japan, he may never face trial. But Kelly evinced no rancor over being left to face trial himself.

He recounted how in the late 1990s, when Nissan was losing money, the French automaker Renault bought a stake in Nissan and sent in Ghosn to help turn the ailing Japanese car maker around.

The experts believed Nissan was doomed, Kelly said, but “Mr. Ghosn proved the experts wrong. Under Mr. Ghosn, Nissan became very profitable.”

Top management at Nissan fretted they might lose Ghosn, who occasionally complained he could make more money elsewhere even though he was paid more than most Japanese top executives. They researched lawful methods to provide incentives for him to say, consulting with in-house and outside attorneys to try to retain him.

“The evidence will show that I did not break the law,” said Kelly, who has a law degree and was hired by Nissan in the U.S. in 1988.

Kelly’s head defense lawyer Yoichi Kitamura said little apart from: “My client is not guilty.”

Later on in the session, another attorney gave more details about the defense's position, stressing that some of the alleged schemes to pay Ghosn were considered and not finalized, or never signed by Ghosn. Kelly was not involved in a couple of the schemes, he argued.

Kelly's wife, Dee, who attended the session, defended her husband outside the courthouse. She said her husband had been going over the evidence for the trial to prepare for the case.

“Greg has done nothing wrong," Dee Kelly said. “I’m very proud of him. He’s an honorable man.”

Nissan is also facing the same charges in the trial as Kelly but has acknowledged guilt and is not contesting the charges. It is paying a 2.4 billion yen ($22.6 million) fine.

A representative for Nissan told the court the pay schemes did not benefit Nissan and were aimed at Ghosn's personal gain, but instead damaged investor trust and tarnished the company's brand.

The prosecutors said that in 2010 Ghosn returned to Nissan 700 million yen (about$6.6 million) that exceeded the amount Nissan would disclose as his compensation. The company considered various ways to pay more compensation to Ghosn, such as paying him through an overseas or outside company, selling him real estate at a discount, giving him a loan that would be forgiven later or increasing his post-retirement compensation.

They said the discussions of how to pay Ghosn more than would be legally disclosed were made “on the premise that he was certain to receive the payments.”

Ghosn has vigorously defended himself, saying he is innocent. The defense has long argued Ghosn’s compensation was never agreed upon, let alone paid.

As is routine in Japanese trials, Tokyo District Prosecutors read from a long opening statement outlining their allegations that Ghosn's compensation was underreported from 2011-2018 by almost half. They contend these were “false entries," a violation of the Financial Instruments Law.

Business experts say Japanese executives are often promised pay but with conditions such as the company performance, and they can end up not getting any money, meaning that how such compensation should be reported may be unclear.

Acquittals are extremely rare in Japanese criminal trials, more than 99% of which result in convictions. Critics have said the system is unfair. But Japanese officials defend the system as having led to a relatively crime-free society, even saying that only those who are almost certainly guilty are being charged.

The maximum penalty for the charge of falsifying fiscal statements is 10 years in prison. The trial is expected to continue for about a year.

___

Yuri Kageyama is on Twitter https://twitter.com/yurikageyama

  • Associated Categories: Associated Press (AP), AP Entertainment, APOnline Celebrity News, AP Business, AP Business - Corporate News
© Copyright 2020 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Japan begins trial of Nissan, ex-executive over Ghosn's pay
The financial misconduct trial of former Nissan executive Greg Kelly has begun
11:06PM ( 27 minutes ago )
Orioles slug 3 homers in 9-run 3rd, pummel Braves 14-1
DJ Stewart hit the first of three Baltimore homers in a nine-run third inning, and the Orioles pounded the Atlanta Braves 14-1 Monday night to end a five-game losing streak
10:42PM ( 51 minutes ago )
Minor tosses 2-hitter, A's manage split with Mariners
Mike Minor tossed a two-hitter with eight strikeouts, Jake Lamb doubled and homered in his first game after signing with Oakland, and the Athletics beat the Seattle Mariners 9-0 in the nightcap of their doubleheader
10:38PM ( 55 minutes ago )
Associated Press (AP)
NFL reminds teams to follow sideline rules on face coverings
The NFL is reminding team personnel on the sidelines about the rules for wearing face coverings
9:06PM ( 2 hours ago )
The Latest: Biden vows to 'restore dignity for everyone'
Democratic presidential nominee Joe Biden is promising to “restore dignity for everyone, especially the poor” if he defeats President Donald Trump in November
8:33PM ( 3 hours ago )
Terry Branstad, US ambassador to China, to leave next month
The U.S. ambassador to China will step down early next month, ending a three-year tenure marked by a trade war and increasingly bitter relations between the world’s two largest economies
8:21PM ( 3 hours ago )
AP Business
Wall Street posts solid gains after surge in corporate deals
Wall Street ended solidly higher Monday following a burst of big corporate deals
5:05PM ( 6 hours ago )
Chick-fil-A: No longer seeking lease at San Antonio airport
Chick-fil-A says it no longer plans to open a restaurant in the San Antonio International Airport, even though the Texas city relented and agreed to let it do so after more than a year of legal wrangling
5:04PM ( 6 hours ago )
US halts imports from China's Uighur region for forced labor
The U.S. has blocked imports from four companies and a manufacturing facility in northwestern China suspected of using forced labor from people detained as part of a sweeping crackdown on ethnic minorities in the region
4:25PM ( 7 hours ago )
AP Business - Corporate News
Orioles slug 3 homers in 9-run 3rd, pummel Braves 14-1
DJ Stewart hit the first of three Baltimore homers in a nine-run third inning, and the Orioles pounded the Atlanta Braves 14-1 Monday night to end a five-game losing streak
10:42PM ( 51 minutes ago )
Minor tosses 2-hitter, A's manage split with Mariners
Mike Minor tossed a two-hitter with eight strikeouts, Jake Lamb doubled and homered in his first game after signing with Oakland, and the Athletics beat the Seattle Mariners 9-0 in the nightcap of their doubleheader
10:38PM ( 56 minutes ago )
Easing fires not as simple as climate change vs. forest work
Deadly West Coast wildfires are dividing President Donald Trump and the states’ Democratic leaders over how to prevent blazes from becoming more frequent and destructive
10:20PM ( 1 hour ago )
Legal advocates line up on both sides of Bill Cosby's appeal
Legal advocates are lining up on both sides of actor Bill Cosby’s appeal as the Pennsylvania Supreme Court prepares to review his 2018 sex assault conviction
10:20PM ( 1 hour ago )
Defense, Snell, Big Ben carry Pittsburgh over Giants 26-16
Ben Roethlisberger did a very Pittsburgh thing in his return to the lineup, riding the Steelers’ defense and running game to victory
10:14PM ( 1 hour ago )