Former Nissan Executive Pleads Not Guilty, Defends Ghosn

Matt Posky
by Matt Posky
former nissan executive pleads not guilty defends ghosn

Greg Kelly, the American businessman and former Nissan board member that was arrested with ex-chairman Carlos Ghosn almost two years ago, has pleaded not guilty to the financial misconduct charges leveled against him in Japan. While he was supposed to stand trial with Mr. Ghosn, Carlos escaped his captors with the help of at least one U.S. Army Special Forces veteran and a lot of careful planning at the end of 2019. Kelly is accused of helping the former chairman hide millions of dollars in deferred compensation.

During the trial, he defended Ghosn by saying he was an outstanding automotive executive who helped save Nissan in its darkest hour. He also hinted that the firm should have done everything in its power to retain him, adding that his role was to find legal ways of keeping Ghosn from jumping ship to a rival company. While that included financial incentives, Kelly asserted during the trial that Nissan’s attorneys were always consulted before decisions were made and that no illegal actions were taken. “I informed Mr. Ghosn what could be done legally and what could not be done legally,” he told the court. “I believe the evidence will show that I did not violate the [financial] disclosure regulations.”

Meanwhile, the prosecution is alleging that Kelly came up with ways to hide payments after Japan introduced new compensation rules in 2010 that forced high-earning executives to report their pay. But they’re convinced that Ghosn had already been paid too much before the laws came into effect and was forced to hide the money or face stiff penalties.

According to Automotive News, Kelly said this isn’t what happened. He claims that Ghosn reduced his pay in response to the updated rules but that Nissan had gotten worried they might lose him as his pay was no longer commensurate with other high-ranking automotive executives. As a result, Kelly said he worked with Nissan to find other ways of keeping Carlos from leaving the company and only acted within the confines of the law.

“This was all in the best interests of Nissan,” he said. “I was not involved in a criminal conspiracy.”

What actually happened remains unclear. We know that Ghosn had been criticized for years for pulling down one of the largest salaries of anybody working in Japan. Hiding tens of millions of dollars in compensation kind of makes sense. Ghosn was also viewed as the savior of Nissan, as he was the one who championed the merger with France’s Renault. During the late 1990s, the Japanese automaker was on the verge of going under until Ghosn and his high-volume strategy turned things around. It’s not out of the question for Nissan to do what it thought was necessary to keep him around.

While Carlos’ work seems much less appreciated these days, as he’s often been scapegoated as the cause of the brand’s current hardships, Kelly said the company desperately wanted to keep him on board between 2010 and 2017. He also stated that former CEO Hiroto Saikawa, other Nissan executives, and attorneys (both from and outside the company) discussed possible ways of compensating Ghosn during that time. Interestingly, Saikawa stepped down from the company in 2019 after admitting he was also “improperly overpaid.”

Despite credible accusations that there was a factional war taking place within the Renault-Nissan-Mitsubishi Alliance near the time of the arrests, it hasn’t been mentioned in the trial. However, Ghosn has commented on it both before and after his escape to Lebanon. While he had already stepped down as CEO of Nissan by 2017, he planned to remain chairman of the alliance and CEO of both Renault and Mitsubishi until his retirement. Before then, he wanted to solidify the industrial partnership via a merger — something that went over poorly in Asia. Japanese shareholders and a substantial number of Nissan employees already believed Renault had far too much influence and didn’t want to deepen ties.

He believes Nissan crafted a case specifically for the purpose of removing him from power and has claimed the Japanese justice system is easily corrupted and extremely biased against foreigners. Ghosn had repeatedly stated he did not expect to receive a fair trial in Japan, adding that it has a suspiciously high conviction rate under the best of circumstances. While Nissan’s internal investigation did find the money “hiding” in Renault-Nissan BV (a Netherlands based joint venture controlled by Ghosn) and a bunch of properties given to the former CEO for the assumed purpose of being flipped for profit, there’s also looming evidence that Nissan was acting specifically to discredit leadership as part of an industrial coup.

But Nissan isn’t the one on trial here. Kelly is and he’ll have to prove that Ghosn’s post-retirement compensation is above board, along with the other assets acquired through Nissan. His lawyers have maintained that Kelly was not involved in making any illicit financial arrangements ( with proof of other signatories on the applicable documents) and that the amount of the compensation earmarked for Mr. Ghosn was never fixed — with no agreement ever finalized and nothing paid.

As the trial is scheduled to last until July 2021, he’ll have plenty of time to plead his case. But it’s assumed that the court will not treat him favorably and may even set out to make an example of him now that the person they really wanted has fled beyond their grasp.

[Image: Plamen Galabov/Shutterstock]

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  • Inside Looking Out Inside Looking Out on Sep 15, 2020

    "Or perhaps Donald Trump could step in and lean on the Japanese govt. a bit." Trump stands alright. It is Biden who has problem standing on his feet (but not on his knees) and needs help from Japanese govt.

  • DOHC 106 DOHC 106 on Sep 15, 2020

    The Japanese court is going to make an example of Mr. Kelly whether he is guilty or not. He is already older, stressed, and supposedly has health issues too. Definitely a position I hope never to be in whether here or abroad and never in Japan.

  • Nrd515 I bought an '88 S10 Blazer with the 4.3. We had it 4 years and put just about 48K on it with a bunch of trips to Nebraska and S. Dakota to see relatives. It had a couple of minor issues when new, a piece of trim fell off the first day, and it had a seriously big oil leak soon after we got it. The amazinly tiny starter failed at about 40K, it was fixed under some sort of secret warranty and we got a new Silverado as a loaner. Other than that, and a couple of tires that blew when I ran over some junk on the road, it was a rock. I hated the dash instrumentation, and being built like a gorilla, it was about an inch and a half too narrow for my giant shoulders, but it drove fine, and was my second most trouble free vehicle ever, only beaten by my '82 K5 Blazer, which had zero issues for nearly 50K miles. We sold the S10 to a friend, who had it over 20 years and over 400,000 miles on the original short block! It had a couple of transmissions, a couple of valve jobs, a rear end rebuild at 300K, was stolen and vandalized twice, cut open like a tin can when a diabetic truck driver passed out(We were all impressed at the lack of rust inside the rear quarters at almost 10 years old, and it just went on and on. Ziebart did a good job on that Blazer. All three of his sons learned to drive in it, and it was only sent to the boneyard when the area above the windshield had rusted to the point it was like taking a shower when it rained. He now has a Jeep that he's put a ton of money into. He says he misses the S10's reliablity a lot these days, the Jeep is in the shop a lot.
  • Jeff S Most densely populated areas have emission testing and removing catalytic converters and altering pollution devices will cause your vehicle to fail emission testing which could effect renewing license plates. In less populated areas where emission testing is not done there would probably not be any legal consequences and the converter could either be removed or gutted both without having to buy specific parts for bypassing emissions. Tampering with emission systems would make it harder to resell a vehicle but if you plan on keeping the vehicle and literally running it till the wheels fall off there is not much that can be done if there is no emission testing. I did have a cat removed on a car long before mandatory emission testing and it did get better mpgs and it ran better. Also had a cat gutted on my S-10 which was close to 20 years old which increased performance and efficiency but that was in a state that did not require emission testing just that reformulated gas be sold during the Summer months. I would probably not do it again because after market converters are not that expensive on older S-10s compared to many of the newer vehicles. On newer vehicles it can effect other systems that are related to the operating and the running of the vehicle. A little harder to defeat pollution devices on newer vehicles with all the systems run by microprocessors but if someone wants to do it they can. This law could be addressing the modified diesels that are made into coal rollers just as much as the gasoline powered vehicles with cats. You probably will still be able to buy equipment that would modify the performance of a vehicles as long as the emission equipment is not altered.
  • ToolGuy I wonder if Vin Diesel requires DEF.(Does he have issues with Sulfur in concentrations above 15ppm?)
  • ToolGuy Presented for discussion: https://xroads.virginia.edu/~Hyper2/thoreau/civil.html
  • Kevin Ford can do what it's always done. Offer buyouts to retirement age employees, and transfers to operating facilities to those who aren't retirement age. Plus, the transition to electric isn't going to be a finger snap one time event. It's going to occur over a few model years. What's a more interesting question is: Where will today's youth find jobs in the auto industry given the lower employment levels?
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