Nissan Motor Co.
said he never conspired to hide
pay, taking the stand in his own defense for the first time in the criminal trial involving disclosure of the former Nissan chief’s compensation.
The 64-year-old Mr. Kelly, an American, was arrested alongside Mr. Ghosn in November 2018 and subsequently charged with violating a Japanese law governing executive pay disclosure. Mr. Ghosn was also charged but escaped Japan in late 2019 on a private jet and now lives in Lebanon, which doesn’t have an extradition treaty with Japan.
Prosecutors allege that Mr. Kelly conspired with Mr. Ghosn, the former chief of Nissan and
to pay Mr. Ghosn the equivalent of about $85 million in compensation after he retired, to avoid disclosing it to shareholders in the years when prosecutors say the amounts were decided.
Speaking in a packed courtroom Wednesday, Mr. Kelly said he looked at ways to pay Mr. Ghosn additional money because he was concerned that the Nissan head could be lured to work at a rival company. But as it became clear Nissan couldn’t simply give Mr. Ghosn more money, Mr. Kelly said he and other Nissan executives examined ways to pay Mr. Ghosn after retirement, including by retaining Mr. Ghosn as a consultant for Nissan. Mr. Kelly said he reasoned that Mr. Ghosn might not quit if he knew another payday was coming.
“I did not conspire with Mr. Ghosn or others,” Mr. Kelly said.
Mr. Kelly’s trial has already lasted eight months, during which witnesses for the prosecution have described a succession of ultimately abandoned plans to pay Mr. Ghosn more than what was disclosed to shareholders. Prosecutors have shown documents, including some signed by Mr. Ghosn, that give amounts for “postponed compensation” in specific years.
Both sides agree that the former Nissan chief never actually received the additional money discussed in those documents, but prosecutors argue the amounts should have been disclosed in Nissan’s financial filings.
According to testimony Mr. Ghosn gave to Japanese prosecutors when he was in custody in Tokyo, which was read in court on Tuesday, Mr. Ghosn said he reviewed plans for postretirement compensation presented by Mr. Kelly and others at Nissan but considered them merely brainstorming. Mr. Ghosn said nothing was decided, so there was nothing to disclose.
Nissan is also a defendant and has pleaded guilty.
Witnesses at the trial have described how Mr. Ghosn responded with concern in 2010 when Japan began requiring the disclosure of pay for any corporate directors receiving more than ¥100 million, equivalent to about $1 million. Worried about a public backlash if people knew his compensation, Mr. Ghosn kept his pay to the equivalent of around $10 million, about half of what the documents show he thought he deserved, witnesses said.
Mr. Ghosn has argued that his accusers were motivated by a desire to halt his planned merger of Renault and Nissan. His arrest was orchestrated by a small group of Nissan executives who gathered evidence on behalf of Tokyo prosecutors.
One of them,
testified that in May 2018 he decided to help facilitate Mr. Ghosn’s ouster from Nissan, because he believed the merger would allow Mr. Ghosn to complete his plan for a postretirement payday. “And I felt the train was about to leave the station and it had to be stopped,” Mr. Nada testified in late January.
Mr. Kelly is due to testify through June. A verdict isn’t expected until late this year or next year. The charges carry a potential prison term of up to 15 years, but prosecutors haven’t said yet how long a sentence they will seek.
Another Ghosn-related trial is set to begin in mid-June in Tokyo. An American father-son duo, former Green Beret Michael Taylor and his son Peter Taylor, are facing charges of helping Mr. Ghosn escape. They were extradited to Japan from the U.S. in March. Their lawyer has declined to comment on how the Taylors will plead.
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