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Former American executive at Nissan is convicted by Japan court

Greg Kelly, charged with underreporting his boss Carlos Ghosn’s pay, received a six-month suspended sentence that will allow him to return to the U.S. immediately.
Image: Greg Kelly, former executive of Nissan Motor Co., walks in to the Tokyo District Court
Greg Kelly, a former executive at Nissan Motor, arriving at Tokyo District Court on Thursday.Zhang Xiaoyu / Pool via Reuters
/ Source: The Associated Press

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

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

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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 center 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 “deferred compensation.” Nissan pled guilty and paid a fine of 200 million yen ($1.7 million).

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 percent of Nissan, while Nissan, which makes the Leaf electric car and Infiniti luxury models, owns 15 percent of Renault. Nissan, based in the port city of Yokohama, owns 34 percent of smaller Japanese automaker Mitsubishi Motor, which is based in Tokyo. The French government owns 15 percent 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. He had received expressions of support from Rahm Emanuel, the new U.S. ambassador to Japan.

“We are relieved that the legal process has concluded, and Mr. and Mrs. Kelly can return home,” Emanuel said in a statement on Thursday. “While this has been a long three years for the Kelly family, this chapter has come to an end.” 

Kelly was hired by Nissan’s U.S. 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 U.S. 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 percent.