Japanese Prosecutors Close Case Against American Ghosn Pay | Economic news
By YURI KAGEYAMA, AP Business Writer
TOKYO (AP) – Japanese prosecutors accused former Nissan executive Greg Kelly of joining a “plot” to illegally pay his former boss Carlos Ghosn, as they finished their pleadings in a lawsuit on Wednesday. a year.
“This unpaid compensation existed is clear,” prosecutor Yukio Kawasaki told Tokyo District Court, quickly reading a thick document.
Kelly, a 30-year veteran of the Japanese automaker, was living in the United States when he was arrested in November 2018 while returning to Japan to attend a meeting.
The first American to be appointed to the Nissan board of directors, Kelly claims to be innocent. He sat calmly in the courtroom, dressed in his usual red tie and dark suit, alongside the defense attorneys. Everyone in the courthouse wore a mask because of the pandemic.
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Kelly told The Associated Press in an interview last month that he did not know all the details of Ghosn’s compensation, but was determined to retain Ghosn, the former chairman of Nissan, due to his extraordinary management skills.
Ghosn was arrested along with Kelly and also maintains his innocence. He escaped his bail at the end of 2019 and fled to Lebanon, the country of his ancestors. He does not have an extradition treaty with Japan.
The charges relate to a salary cut of around 1 billion yen ($ 10 million) per year that Ghosn voluntarily started taking from 2010, cutting his salary in half after the disclosure of the executive’s high salaries was became compulsory in Japan.
Neither party disputes this cut. The controversy revolves around whether this money should have been declared as compensation as a de facto pledged sum under a binding contract, or should not have been disclosed until it be finalized.
Nissan Motor Co. officials have considered various ways to make up for the money Ghosn gave up, such as paying him consultation fees after his retirement. They also thought about other methods such as payments through subsidiaries and stock options. Nothing had been paid at the time of the arrests.
Ghosn said a group of Nissan engineered his arrest because they feared French automaker Renault, which owns 43% of Nissan, would take control over the company. Other Nissan officials made similar comments during Kelly’s trial.
Renault sent Ghosn to Nissan in 1999 to lead its rescue on the brink of bankruptcy. He successfully led the maker of the Leaf electric car and luxury Infiniti models for nearly two decades.
Ghosn has also been charged with allegations of breach of trust centered on the use of Nissan’s money for personal gain, ranging from housing, his children’s school fees, to the use of a jet. business and purchases such as a chandelier. Ghosn said they were needed for the job.
Nissan, based in Yokohama, as a company and a legal person, was also indicted and pleaded guilty.
Nissan is struggling to return to profitability after racking up two consecutive years of red ink, with the damage from the coronavirus pandemic adding to the Ghosn scandal.
Egor Matveyev, who teaches at the MIT Sloan School of Management, calls the Ghosn case “a clear example of corporate governance failure.”
Nissan reshuffled its board of directors in 2018-2019, including instituting separate nomination, compensation and audit committees, but questions remain as to whether Nissan has completely gotten rid of all of its governance issues. and whether the current board is ready to let Nissan compete in the global market, scale, ”he said.
Nissan declined to comment on a class action lawsuit filed by investors in Tennessee over the fall in the automaker’s share price.
A small group of Kelly supporters, including Jamie Wareham, Kelly’s lawyer in the United States, staged a protest late last week at the White House and the Japanese Embassy, demanding Kelly’s release . The protest was timed to coincide with a visit to Washington by Japanese Prime Minister Yoshihide Suga.
“The whole case against Greg Kelly and Carlos Ghosn is a sham,” Wareham said.
If found guilty of breaking the Financial Instruments and Foreign Exchange Act, Kelly could face up to 15 years in prison. The verdict of a three-judge panel is not expected until March of next year.
Yuri Kageyama is on Twitter https://twitter.com/yurikageyama
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