Greg Kelly, a close aide of former Nissan Motor Co. Chairman Carlos Ghosn, claims Japan’s Financial Services Agency told him it was unnecessary to report the remuneration Ghosn was set to receive after retirement, sources with knowledge of the matter said Thursday.
Tokyo prosecutors believe the two were aware of the need to report Ghosn’s post-retirement package but did not do so. Kelly, however, is likely to deny allegations that he intentionally falsified securities reports, they said.
The former Nissan representative director was arrested along with Ghosn on Nov. 19 on suspicion of conspiring to engage in financial misconduct. Kelly has said he consulted with a public accountant and a lawyer in addition to the FSA over the need to report the post-retirement payment, according to the sources. He has also told prosecutors there was no need to report the remuneration as it had not yet been settled, the sources said. Kelly’s lawyer in the United States said Wednesday that Kelly “absolutely believes what he did was legal.”
Under the Financial Instruments and Exchange Act, remuneration must be disclosed in a securities report when it is becomes set, even if the actual payout is planned in the future.
The post-retirement payment that went unreported for eight years from fiscal 2010 totaled roughly ¥8 billion ($70 million) and was scheduled to be paid at least partially as consultation fees. Ghosn allegedly thought he should receive some ¥2 billion annually as remuneration but instructed Kelly to state in securities reports that he earned ¥1 billion a year instead and planned to receive the remainder after retirement, the sources said.
The FSA said it does not comment on individual cases.
Ghosn was arrested by prosecutors for allegedly violating the financial instruments law by underreporting his remuneration by around ¥5 billion over five years to March 2015, even though he received some ¥10 billion in the period.
The prosecutors are also considering building a case against him for underreporting a further ¥3 billion in remuneration received over three years from April 2015. Ghosn has denied the charge.
Meanwhile, the top executives of Nissan, Renault SA and Mitsubishi Motors Corp. announced after meeting Thursday that they will maintain the three-way automaker alliance, stressing that their cooperation had produced success that could not be compared to anything else.
Following the meeting, Nissan said the policy was confirmed as a result of the discussion between the three firms’ top executives. The leadership vacuum at one of the world’s largest automaker groups is turning into a power struggle between Nissan, which wants to review the alliance to have more say, and Renault, whose biggest shareholder — the French government — wants someone from the French automaker to lead the group.
Nissan CEO Hiroto Saikawa and Mitsubishi Motors CEO Osamu Masuko were expected to exchange views via video conference with Renault’s acting CEO Thierry Bollore at Renault-Nissan BV, a company overseeing the alliance in Amsterdam.
Ghosn was dismissed as chairman at both Japanese automakers, but remains CEO and chairman of Renault following the 64-year-old’s arrest.