Former Nissan Co. director Greg Kelly pleaded not guilty Tuesday to conspiring to understate the remuneration of his former boss Carlos Ghosn by billions of yen, during the first hearing of his trial at the Tokyo District Court — nearly two years after his arrest.
Kelly, a U.S. citizen, has been indicted for conspiring to hide ¥9.1 billion worth of payments in compensation and retirement benefits over eight years through March 2018. If convicted, he could face up to 10 years in prison.
“I was not involved in a criminal conspiracy,” Kelly told the court in English.
During Tuesday’s hearing, held the same day Kelly celebrated his 64th birthday, the prosecution argued that Ghosn’s income had totaled about ¥17 billion and that Kelly’s former boss had instructed him to find ways for Ghosn to receive full remuneration between fiscal 2010 and fiscal 2017 without disclosing the entire sum.
Prosecutors alleged that Nissan listed Ghosn’s payment as only about ¥7.9 billion in its financial reports, hiding payments totaling about ¥9.1 billion.
Kelly stressed he had not violated any Japanese laws. He said he offered advice to Ghosn following consultations with Nissan’s in-house lawyers and independent attorneys, saying his suggestions were in line with Japan’s financial laws.
He said he was hopeful that evidence to be presented in the trial would prove his innocence.
“I believe the evidence will show” that I did not break the law, he said.
Ghosn, who also faces aggravated breach of trust charges, has claimed he was a victim of a coup at the automaker.
Kelly has been accused of having made suggestions regarding how to avoid listing the full remuneration in financial reports. Such methods included deferring payment until Ghosn’s retirement, in order to record the balance as compensation in an advisory role instead.
During the hearing, Kelly praised Ghosn’s leadership, stressing that the former chief executive rescued the company from the brink of bankruptcy and proved experts, who believed Ghosn would fail, wrong.
Calling Ghosn “an extraordinary executive,” Kelly stressed that Nissan became highly profitable under the charismatic CEO’s reign. “Mr. Ghosn fiercely protected Nissan’s independence.”
Kelly spent more than 30 years with the Japanese automaker, becoming the first American to sit on its board.
Nissan is also a defendant in the trial, being charged with misreporting Ghosn’s remuneration and other executives for years. The carmaker pleaded guilty during the hearing. Nissan has already accepted a penalty imposed by the Financial Services Agency and agreed to pay ¥2.42 billion in fines.
Since Ghosn’s dramatic escape to Lebanon last December — befitting a Hollywood movie — Kelly has been left to face the trial alone. As Japan has no extradition treaty with Lebanon, odds that Ghosn will be tried in Japan are exceedingly slim.
Renault owns around 43 percent of Nissan shares, which in turn owns a 15 percent stake in the French automaker.
Kelly was arrested on Nov. 19, 2018, the same day as Ghosn, and was jailed soon after he arrived in Japan for a Nissan board meeting.
He was released on bail set at ¥70 million about a month after being jailed. Kelly has since been prohibited from leaving the country pending the ruling in his case.
Kelly’s trial was originally planned for April but was postponed due to the ongoing novel coronavirus pandemic. It is expected to last about a year, with a total of 76 public hearings scheduled until July 9 next summer.
Among the witnesses who will testify throughout the trial is Hiroto Saikawa, a former Nissan CEO who resigned in September last year after it emerged he had been overpaid roughly ¥47 million in an equity-linked remuneration scheme.