Japan prosecutors seek 2 years in prison for ex-Nissan exec Greg Kelly

TOKYO — Japanese prosecutors demanded two many years in jail for former Nissan government Greg Kelly and accused him of signing up for a “conspiracy” to spend his former boss Carlos Ghosn illicitly in closing arguments Wednesday in a yearlong trial.

“That unpaid payment existed is clear,” prosecutor Yukio Kawasaki informed the Tokyo District Court docket, looking through briskly from a thick document.

Kelly, a thirty-calendar year veteran at the Japanese automaker, was dwelling in the U.S. when he was arrested in November 2018 upon returning to Japan to go to a assembly.

The first American to be appointed to Nissan’s board, Kelly states he is harmless. He sat calmly in the courtroom, putting on his regular crimson tie and darkish fit, along with defense attorneys. Everyone in the courthouse was putting on a mask because of the pandemic.

Kelly informed The Connected Press in an interview previous month he did not know all the particulars of Ghosn’s spend. He was decided to keep Ghosn, Nissan’s former chairman, because of his remarkable management techniques and wished to spend him in a lawful way, he claimed.

Ghosn was arrested at the very same time as Kelly and also maintains he is harmless. He skipped bail in late 2019 and fled to Lebanon, the country of his ancestry. It has no extradition treaty with Japan.

The fees heart around a spend slash of about one billion yen ($ten million) a calendar year that Ghosn voluntarily begun having from 2010, halving his spend soon after disclosure of superior government spend grew to become obligatory in Japan.

Nissan Motor officers considered various means to make up for the cash Ghosn gave up, this sort of as having to pay him consulting fees soon after retirement. They also mulled other strategies this sort of as payments through subsidiaries and stock possibilities. Nothing at all experienced been paid out at the time of the arrests. The competition is over no matter if that cash need to have been claimed as payment as a de facto promised sum less than a binding contract, or didn’t need to have to be disclosed right up until it was finalized.

Ghosn has claimed a group at Nissan engineered his arrest because they feared that French automaker Renault, which owns forty three% of Nissan, would gain a lot more command over the enterprise. Other Nissan officers designed comparable remarks all through Kelly’s trial.

Renault despatched Ghosn to Nissan in 1999 to direct its rescue from the brink of individual bankruptcy. He efficiently steered the maker of the Leaf electric car or truck and Infiniti luxury designs for nearly two decades.

Ghosn has also been billed with breach of rely on allegations centered around utilizing Nissan cash for particular gain, ranging from housing, tuition payments for his kids, use of a corporate jet and buys this sort of as a chandelier. Ghosn has claimed they have been needed for do the job.

Yokohama-centered Nissan, as a enterprise and lawful entity, has also been billed, and has pleaded responsible. The prosecutors on Wednesday requested that Nissan be fined two hundred million yen ($one.eight million).

Nissan is having difficulties to revert to profitability soon after racking up two straight many years of crimson ink, with the hurt from the coronavirus pandemic coming on top rated of the Ghosn scandal.

Egor Matveyev, who teaches at the MIT Sloan University of Administration, calls the Ghosn case “a clear case in point of corporate governance failure.”

“Nissan did overhaul their board in 2018-2019, together with instituting separate nomination, payment, and audit committees, but concerns still continue being no matter if Nissan received fully rid of all its governance complications and no matter if the latest board is poised to allow Nissan compete on the world scale,” he claimed.

The enterprise has declined remark on a course-action lawsuit submitted by traders in Tennessee over how the automaker’s share price has dropped.

A small group of Kelly’s supporters, together with Jamie Wareham, Kelly’s lawyer in the U.S., held a protest late previous 7 days at the White House and the Japanese Embassy, demanding Kelly be released. The protest was timed to coincide with a pay a visit to to Washington by Japanese Primary Minister Yoshihide Suga.

“The complete case in opposition to Greg Kelly and Carlos Ghosn is a sham,” Wareham claimed.

The greatest penalty for violating the Economical Instrument and Trade Ac is 15 many years in jail. The verdict from a panel of three judges is not expected right up until March 2022.

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