KAORU YAMADA, Nikkei staff writer
TOKYO — Carlos Ghosn, the fugitive former Nissan Motor chairman, was the main figure responsible for hiding his earnings in key securities reports, the Tokyo District Court determined on Thursday, blaming greed and the automaker’s weak governance for the high-profile scandal.
Ghosn and former Nissan executive Greg Kelly are accused of underreporting Ghosn’s remuneration by about 9.1 billion yen ($79 million at current rates) in financial reports between fiscal 2010 and 2017. Kelly, an American citizen, was found partly guilty on Thursday, receiving a suspended six-month sentence. Nissan was fined 200 million yen.
Ghosn, having fled Japan in 2019, was not present at the proceedings.
The trial focused on three main questions: whether Ghosn received unpaid compensation, whether his and Kelly’s actions amounted to false reporting, and whether the two executives had conspired together.
Chief Judge Kenji Shimotsu on Thursday said testimony from the former head of Nissan’s secretarial office and documents showed that Ghosn had indeed received unpaid compensation.
“Executive compensation is a reflection of a company’s governance,” the judge said. He concluded that by purposefully omitting Ghosn’s unpaid compensation from Nissan reports, he and the head of the secretarial office “provided inaccurate information to investors,” which amounted to false reporting.
Still, Shimotsu ruled that Kelly was only responsible for conspiring with Ghosn in fiscal 2017, and not between fiscal 2010 and 2016.
“We cannot disregard his responsibility,” the judge said. “But the main culprit is Ghosn, and the actions in this case were taken for the former chairman’s benefit.”
The judge said the misconduct at Nissan was driven by Ghosn’s greed and self-interest. “If his actual remuneration became public, he could have run into problems with the French government, which is a shareholder in [Nissan partner] Renault, and potentially lost his social status,” Shimotsu said.
“The misconduct by a globally renowned executive shocked not just the business sector, but society at large as well,” he said.
He also blamed Nissan’s corporate culture “shaped under the former chairman’s long-term, authoritarian leadership,” criticizing its other executives for failing to properly monitor Ghosn.
The automaker “only has itself to blame” for the blow to its reputation over the scandal, Shimotsu said.
Ghosn called the judgement a “save-face verdict” in a Zoom call with a small group of reporters, according to an AP report. “This story is far from finished,” he said. “Justice is far from rendered.”
Nissan said it is currently reviewing the ruling, while prosecutors said they were disappointed by the court’s decision would consider next steps after deliberation.
Ghosn was arrested with Kelly in November 2018. He escaped from Japan while under house arrest in December 2019, eventually making his way to Lebanon. Legal proceedings against him have essentially been at a standstill.
Ghosn continues to deny any wrongdoing, including in an interview last year with Nikkei.