Greg Kelly, former Ghosn aide at Nissan, gets six-month suspended sentence

Greg Kelly was found guilty of helping his boss Carlos Ghosn, who fled Japan on a private jet, from evading pay-disclosure laws. But he has been handed a suspended sentence.

Former Nissan executive Greg Kelly, who will likely dodge prison time after being handed a suspended sentences, poses at his apartment in Tokyo. Picture: Behrouz Mehri / AFP.

Former Nissan executive Greg Kelly was found guilty of helping former Chief Executive Carlos Ghosn evade Japan’s pay-disclosure laws during one fiscal year, but the Tokyo District Court cleared him of other charges and gave him a suspended sentence, meaning he probably won’t have to serve prison time.

The court found Mr Kelly guilty in connection with Nissan’s financial report for the fiscal year ending March 2018, but said he wasn’t guilty of wrongdoing on other Nissan reports stretching back nearly a decade. The ruling amounted to a rejection of much of the Japanese prosecutors’ case.

Mr Kelly was given a six-month sentence, suspended for three years. The sentence means he won’t serve prison time as long as he maintains good behaviour during the three-year period. Both sides can appeal the ruling.

Prosecutors had sought a two-year sentence for Mr Kelly.

The verdict concludes the first and possibly only trial regarding the charges for which Mr Ghosn was arrested in late 2018. Mr Ghosn was supposed to have been a co-defendant alongside Mr Kelly, but he fled Japan to Lebanon at the end of 2019 by smuggling himself aboard a private jet.

Prosecutors said that for a decade, Mr Ghosn arranged for himself to receive a portion of his salary after he retired without disclosing it to shareholders.

Mr Kelly, 65, the former head of Nissan’s CEO office, was accused of helping Mr Ghosn in the alleged violation of pay-disclosure rules. Both men said they were innocent.

Mr Ghosn’s downfall has left a trail of collateral damage. Many executives associated with him have left Nissan, while the company has cut thousands of jobs at factories around the world as it reversed Mr Ghosn’s strategy of seeking to make the alliance – led by Nissan and partner Renault SA – into the world’s biggest automaker.

Two of the men who helped Mr Ghosn escape, former Green Beret Michael Taylor and his son Peter Taylor, were extradited to Japan from the US in March 2021 to face trial. They pleaded guilty and were sentenced in July 2021 to prison terms of two years and a year and eight months, respectively. They are serving their sentences in separate prisons on the outskirts of Tokyo.

Three Turkish nationals – two pilots and a manager of the private jet company that flew Mr Ghosn out of Japan – were convicted in their home country of migrant smuggling.

Witnesses at the trial described how Mr Ghosn slashed his pay roughly in half in 2010 after Japan passed a law mandating disclosure of any executive’s compensation if it was above a yen equivalent of around $US1m. They testified he did so out of fear of a public backlash.

Mr Kelly testified that Mr Ghosn had been unhappy with earning a smaller paycheck. Mr Kelly, who at one point oversaw Nissan’s human resources department, said he was tasked with finding a solution.

Those solutions took a variety of forms over the next eight years, none of which came to fruition. Both Mr Kelly and Mr Ghosn argued that this was a key flaw in the prosecutors’ case and said Mr Ghosn wasn’t obligated to disclose potential compensation plans that weren’t finalised or approved by Nissan’s board.

Prosecutors argued that this formality was a fig leaf meant to disguise the fact that Mr Kelly was postponing a portion of Mr Ghosn’s salary until after retirement without disclosing it, as the law requires.

The Wall Street Journal