Tokyo, Sept. 15 (Jiji Press)–Former Nissan Motor Co. <7201> director Greg Kelly pleaded not guilty in his first hearing at Tokyo District Court Tuesday over an alleged shady pay scheme for former Nissan Chairman Carlos Ghosn.
In the hearing, Kelly, 64, denied that he was involved in the suspected concealment of part of Ghosn’s executive compensation. The court procedures are being held without Ghosn, 66, present, as he jumped bail and secretly fled Japan while awaiting trial.
Over the same case, Nissan, as a company, admitted the charges against it. Nissan has been indicted under a dual liability clause, which calls for punishing a company together with the employee who committed a crime as part of corporate activities.
According to the indictment, Kelly and Ghosn allegedly conspired to understate Ghosn’s total pay in fiscal 2010 to fiscal 2017 by about 9.1 billion yen in Nissan’s securities reports, in violation of the financial instruments and exchange law.
In its opening statement at the court on Tuesday, the prosecution said Ghosn instructed Kelly and others to study a scheme to allow Ghosn to receive part of his remuneration in an undisclosed way.
The instruction came after the disclosure of the names of corporate executives with annual compensation of 100 million yen or more, as well as the amounts of their pay, became mandatory in 2010, according to the prosecution.
Prosecutors claimed that Kelly had drawn up contracts that would give pay as advising fees to Ghosn after his resignation as head of Nissan, making Kelly culpable in the conspiracy.
The defense side said in its opening statement that while Kelly was involved in a study on the method of remuneration payments to Ghosn, he only considered a legal way for the payments.
It argued that the documentation on the unpaid remuneration, signed between Ghosn and a former head of the Nissan secretary office, who agreed on a plea-bargaining deal with the prosecution, did not undergo appropriate internal procedures and that the amount of remuneration had not been fixed.
At least 70 court hearings are planned to be held on the case by July next year. The hearings within this year will be attended by the former secretary office head, while former Nissan President Hiroto Saikawa, 66, is expected to give testimony next year.
Ghosn is also charged with aggravated breach of trust for allegedly pocketing Nissan funds, but his escape from the country has made it difficult to open court procedures for the former Nissan boss.