TOKYO — Former Nissan Motor Co.
Greg Kelly set to spend two years in jail for alleged role in cover-up of former Nissan NSANY 0.78%
the salary of the public chief Carlos Ghosn, Japanese prosecutors said on Wednesday in a Tokyo court.
MM. Ghosn and Kelly “worked to hide income until 2018,” said prosecutor Yukio Kawasaki. “Failure of governance is a deep problem for such a socially important company. “
The sentencing request came during final argument by prosecutors in the case in Tokyo District Court. Mr Kelly says he is innocent, and the court’s three-judge panel is expected to deliver a verdict next year. If he is found guilty, the court will also decide his sentence.
Mr Kelly, 65, has been charged with violating a policy governing the public disclosure of executive salaries. Under the law, the maximum sentence in Mr Kelly’s case would be 15 years, but prosecutors said two years would be appropriate.
Mr Kawasaki said prosecutors would have asked for a longer sentence, but took into account that Mr Kelly had already been in Japan for almost three years since his arrest. His trial started a year ago
Nissan has also been indicted as a company and does not dispute the allegations. Prosecutors recommended that Nissan pay a fine equivalent to about $ 1.8 million.
The disclosure regulations, which came into effect in 2010, required companies to disclose the salary of any executive earning more than about $ 1 million in the year the salary was determined. Prosecutors alleged that Mr. Ghosn, chief executive and later chairman of Nissan, with Mr. Kelly’s help, arranged for about half of his compensation to be deferred each year until after his retirement.
During the trial, which began in September 2020, prosecutors presented documents and testimony from a Nissan employee named Toshiaki Ohnuma. Each year, Mr. Ohnuma created a document dividing Mr. Ghosn’s compensation into two categories: paid compensation and deferred compensation. Prosecutors allege Mr. Kelly was aware of the deferred compensation and should have ensured that Nissan included it in the company’s annual securities filings.
“Kelly played a critical and essential role in these events. He was essential in carrying out these acts and had the confidence of Ghosn, ”said Mr. Kawasaki, the prosecutor.
Mr Kelly said he had never seen a document titled deferred compensation or such calculations until June 2018, when Mr Ohnuma presented him with a figure calculated by Mr Ghosn.
Mr Kelly said he was working on potential methods of paying Ghosn after his retirement to prevent the executive from going to work elsewhere, but said nothing was worked out and nothing was needed to be made public.
Mr. Kelly also testified that the total amount of retirement pay he provided for Mr. Ghosn remained the same between 2011 and 2018, at around $ 90 million to $ 100 million. Defense attorneys say this contradicts prosecutors’ arguments, because if the post-retirement pay proposed by Mr Ghosn was supposed to reflect deferred pay for each year’s work as an executive, the figure should have increased every year. and not stay the same.
Mr Ghosn, who lives in Lebanon after fleeing Japan in December 2019, said the documents referring to deferred compensation were simply a way to record what Nissan was worth and were not binding. He says he’s innocent and ran away because he couldn’t get a fair trial.
Both parties to the lawsuit agree that Mr Ghosn cut his pay by about half when the disclosure regulations came into effect because he feared a backlash from the public and the French government, which is the partner’s major shareholder. of the alliance of Nissan, Renault. HER
. The parties also agree that Mr. Ghosn never received the money described in the documents as deferred compensation.
U.S.-based Mr Kelly’s attorney Jamie Wareham de Fried, Frank, Harris, Shriver & Jacobson LLP called the Japanese case a sham and said the charges were motivated by the desire of Nissan executives and government officials to prevent a Nissan merger. and Renault.
Write to Sean McLain at [email protected]
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