Japanese auto giant Nissan Motor, one of Middle Tennessee’s largest employers, has seen one of its former US executives convicted and now cleared of most charges in Tokyo District Court.
Greg Kelly was arrested in November 2018 along with former Nissan CEO Carlos Ghosn. Ghosn headed the Renault-Nissan-Mitsubishi alliance, and Kelly was accused of underreporting Ghosn’s compensation for eight years.
Both insisted on their innocence, but Kelly appeared particularly calm during the hearing in which the verdict, which seemed to surprise him, announced Thursday his sentence of six months, suspended for three years.
Kelly is also allowed to return home to the United States during the appeal, which her defense attorneys have already publicly stated they intend to file. Kelly planned to return to Tennessee now that the trial, which began in September 2020, is over. Kelly is out on bail and lives with his wife in Tokyo.
“I have always acted in Nissan’s best interests and have never been involved in any unlawful act,” Kelly said after the verdict was delivered.
The court acquitted Kelly of some counts, but not all, still ruling against him for one of eight years in which Ghosn’s compensation would have been understated. Kelly’s legal team, led by Yoichi Kitamura, said the verdict was still wrong, even to charge him for one of those years.
“Kelly is completely innocent. We cannot accept the flawed decision that found him guilty for this past year,” Kitamura said in a prepared statement.
Prosecutors initially pushed for Kelly to be sentenced to two years in prison. They initially accused Ghosn, Kelly and Nissan of understating Ghosn’s compensation by approximately $78 million (9 billion yen) from 2011 to 2018. Kelly and his defense claimed the purpose was simply to prevent Ghosn from jumping ship for a competitor.
Nissan North America, headquartered in Franklin since 2006, hired Kelly in 1988. Kelly became a representative director six years after the U.S. division moved to Tennessee. At the time, the US auto industry had just emerged from a two-year slump that capped the Great Recession and ran into an $85 million Obama-era bailout.
The innocence of both Kelly and Ghosn rests on the argument that the compensation in question was never actually paid to Ghosn or duly determined. Ghosn, however, was conspicuously absent during the trial after posting bail in late 2019. After serving two lengthy prison stints previously, he hid in a musical instrument cargo crate aboard a private jet and fled to Lebanon where he was raised and has citizenship.
Lebanon does not have an extradition treaty with Japan, and Lebanese authors and filmmakers have drawn inspiration from Ghosn’s story for books and films.
Chief Justice Kenji Shimotsu made several invective statements during yesterday’s session against Ghosn, for example calling his leadership at Nissan a “dictatorial rule”. He also said that Nissan’s mismanagement had detrimentally misled investors.
Judge Shimotsu said the alleged compensation arrangement was “conducted solely from [Ghosn’s] personal greed.
“There is absolutely no room for extenuating circumstances in his motive,” he said.
Ghosn gathered several reporters from various news outlets for a Zoom call on which he addressed the verdict and Nissan’s direction. He called the decision a “saving verdict” for Nissan executives and prosecutors. He also claims that Nissan management colluded against him, Kelly, Renault and the shareholders.
“I’m relieved for Greg and his family,” Ghosn said, however. “This story is far from over. Justice is far from done.
Ghosn took the opportunity to also reiterate his vehement denial of all the allegations made against him, including that he conspired with Toshiaki Ohnuma, another Nissan executive, to calculate the unpaid compensation so that it was paid to him surreptitiously at a later date.
Both Tennessee senators expressed their support for Kelly now that he is returning to the United States.
“I know Greg and his family are overwhelmed with the support they have received and are relieved to know that Greg can finally return to the United States,” Sen. Bill Hagerty, former U.S. ambassador to Japan, said in a statement. . “I personally look forward to welcoming him to Nashville International Airport in the very near future for his return.
“Greg was subjected to circumstances that corporate America could never contemplate. What should have been a decision by the company’s board of directors landed in the Tokyo prosecutor’s office. Greg is innocent of the charges against him , and I’m beyond thrilled that he’s coming home to Tennessee.”
Senator Marsha Blackburn also weighed in on the news.
“Greg and Dee Kelly endured an ordeal that spanned years of false allegations, a lockdown in Japan and a lengthy legal battle,” she said in a statement. “They were strong and held on to hope that they could return home to their family, children, grandchildren, friends and community. We are thrilled that day is coming soon.
“We thank everyone who worked tirelessly alongside them to make this happy homecoming a reality, and we wish them all the best as they return home to Tennessee.”