A ruling is set to be handed down Thursday in the trial of Greg Kelly, an aide to former Nissan Motor Co. Chairman Carlos Ghosn who is charged with violating the Financial Instruments and Exchange Law by understating Ghosn's executive remuneration on the company's securities reports.
More than 60 hearings have been held in the trial, with Ghosn, the key figure in the allegations, remaining a fugitive abroad. In addition to determining whether Kelly will be held criminally responsible, the Tokyo District Court's ruling may also affect the use of plea bargains in Japan.
Trusted 'chief of staff'
"This role could only have been played by Kelly, whom Ghosn trusted completely," a prosecutor said during closing arguments on Sept. 29. Calling Kelly the "chief of staff," prosecutors demanded he be given two years in prison for devising a system to hide part of Ghosn's pay.
A former representative director of Nissan, Kelly was indicted for conspiring with Ghosn and others to understate Ghosn's executive remuneration. It is alleged that Ghosn's pay over the eight years through fiscal 2017 was actually about 17 billion yen, but was underreported by about 9.1 billion yen in the company's securities reports.
Prosecutors claimed that Kelly -- at the direction of Ghosn, who allegedly wanted to avoid criticism of his high pay -- consulted with Toshiaki Onuma, 63, a former head of the secretaries' office at Nissan, and chose to keep some of the remuneration secret.
They also claimed that Kelly was aware of the "unpaid" remuneration because he read through documents prepared by Onuma that listed the hidden amount down to the yen.
Kelly claims ignorance
The defense team countered in its closing arguments on Oct. 27, saying that Kelly had not seen the documents and had not been told there was secret remuneration. His lawyers also argued that Nissan had not officially decided whether to pay the alleged "unpaid" remuneration, and that even if it existed, the hidden pay did not constitute false statements subject to criminal penalties.
This is the first time that underreporting executive remuneration has been treated as a violation of the law. Much attention is likely to be paid to the district court's decision as to whether executive pay is an important matter that should be disclosed to investors.
Testimony of ex-chief secretary
Another focus of the trial was whether the testimony of Onuma could be trusted.
Onuma's indictment was suspended because he and the special investigation squad of the Tokyo District Public Prosecutors Office agreed to the Japanese version of a plea bargain. After that Onuma appeared in court about 20 times and testified that there had been unpaid remuneration.
He also said he discussed with Kelly how to pay the money secretly, which the prosecutors treated as important testimony.
Plea bargaining was introduced in Japan in June 2018, and is expected to serve as a new weapon in investigations to uncover organized crime. However, there is also concern that false statements could lead to erroneous charges.
With that in mind, Kelly's defense team has claimed that Onuma "may make false statements, so he cannot be trusted." Thursday's ruling could have an impact on future plea bargains.
The Nissan company has admitted the charges, and a ruling will also be handed down to the carmaker on Thursday.
Ghosn fled to Lebanon. His trial has yet to be held, both in this case and over alleged aggravated breach of trust under the Companies Law, in which he is accused of leaking Nissan funds.
Read more from The Japan News at https://japannews.yomiuri.co.jp/
