Tokyo court gives ex-Nissan executive Kelly suspended sentence

The verdict announced Thursday will allow Kelly to return to the US immediately.

A Tokyo court gave Greg Kelly, a former American executive at Nissan Motor charged with underreporting his boss Carlos Ghosn's pay, a 6-month suspended sentence.

The verdict announced Thursday will allow Kelly to return to the US immediately.

Kelly was arrested in November 2018 at the same time as Ghosn, former Nissan chairman and head of the Renault-Nissan-Mitsubishi alliance. Both have insisted they are innocent, arguing that the money at the centre of the charges was never paid or decided.

The judge found Kelly not guilty of some counts but guilty of charges for one year only. His sentence was suspended for three years.

The trial began in September 2020, with Ghosn absent after he jumped bail in late 2019, hiding in a box for music instruments on a private jet. He fled to Lebanon, which has no extradition treaty with Japan, and has been writing books and making movies about the ordeal after his arrest.

Kelly and his legal team, headed by Yoichi Kitamura, argued during the trial at Tokyo District Court that Kelly was searching for legal ways to pay Ghosn to stop him from leaving for a competitor.

Prosecutors had asked that Kelly be sentenced to two years in prison. They alleged Ghosn, Kelly and Nissan Motor Co. underreported Ghosn's compensation by 9 billion yen ($78 million) in filings over eight years through 2018.

During the trial, the prosecution presented as evidence various documents calculating Ghosn's so-called deferred compensation. Nissan pled guilty and paid a 200 million yen ($1.7 million) fine.

Ghosn was a superstar at Nissan, which he headed for nearly 20 years. French alliance partner Renault SA sent him to lead a turnaround of its near-bankrupt alliance partner. His downfall was sudden, with Nissan officials who had been close to him accusing him of amassing power for personal gain and planning a merger of Nissan with Renault.

Renault owns 43% of Nissan, while Nissan, which makes the Leaf electric car and Infiniti luxury models, owns 15% of Renault. Nissan, based in the port city of Yokohama, owns 34% of smaller Japanese automaker Tokyo-based Mitsubishi Motor. The French government owns 15% of Renault.

Japanese executives tend to be paid far less than their American counterparts, an important factor in the trial. Disclosure of high executive pay became required in Japan in 2010, and what was disclosed for Ghosn, at about $9.5 million even without the deferred compensation, had raised eyebrows.

Kelly has been out on bail and living with his wife in a Tokyo apartment. U.S. Ambassador to Japan Rahm Emanuel recently expressed support for Kelly, saying he hoped Kelly could soon be reunited with his grandchildren in the U.S.

I am now here as a representative of the United States, and Mr. Kelly is a citizen of the United States, and this comes with the obligations as the ambassador of the United States to advocate on his behalf, Emanuel said.

Kelly was hired by Nissan's US division in 1988, more than a decade before Ghosn arrived at Nissan, and became a representative director in 2012, the first American on Nissan's board. He worked mostly in legal counsel and human resources.

Separately, two Americans extradited from the US to Japan on charges of smuggling Ghosn out of Japan were found guilty in July 2021. Michael Taylor was sentenced to two years in prison, while his son Peter was sentenced to one year and eight months.

The conviction rate in Japanese criminal trials exceeds 99%.

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