Business / Corporate

Carlos Ghosn’s close aide Greg Kelly drafted documents on deferred pay: sources

Kyodo

Greg Kelly, a close aide of ousted Nissan Motor Co. Chairman Carlos Ghosn, had prepared over the span of several years documents outlining plans for the top executive to receive part of his pay after retirement, sources with knowledge of the matter said Saturday.

Prosecutors believe that by not disclosing deferred compensation, Ghosn and Kelly violated a law requiring executive compensation to be disclosed in financial reports on an annual basis.

The two were arrested nearly two weeks ago for alleged financial conduct and remain in custody in Tokyo. Their detention was extended for another 10 days on Friday even though they have yet to be formally charged.

According to the sources, Kelly drew up the documents over the course of several years from around 2010. Some of them worked under the assumption that Ghosn would resign as chairman of not just Nissan but also the alliance with Renault SA and Mitsubishi Motors Corp. Some bore the signatures of Ghosn and Kelly.

Kelly, 62, has acknowledged signing the documents but argues they are void because they had not gone through the process of official approval, the sources said.

The documents show the annual compensation of Ghosn, one of Japan’s highest paid executives, had been set at around ¥2 billion, with roughly ¥1 billion to be paid after he stepped down.

The documents said it was to compensate Ghosn for consultation work and to prevent him from joining a rival automaker.

The two were arrested on Nov. 19 on suspicion of violating the Financial Instruments and Exchange Act by reporting only ¥5 billion of Ghosn’s ¥10 billion compensation during the five years through March 2015.

Prosecutors believe Ghosn, 64, also failed to disclose a further ¥3 billion during the three-year span through March this year.

Nissan, which said it launched a months-long internal probe following a whistleblower report, removed the Brazilian-Lebanese-French businessman as chairman on Nov. 22.

Its probe uncovered his alleged “deep involvement” in “significant acts of misconduct,” including using company assets for personal gain and understating the amount of his remuneration in securities reports, according to Nissan.

He has also been dismissed as chairman of alliance partner Mitsubishi Motors but remains chairman and CEO of Renault.