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EXPLAINER: Verdict for American at Nissan in Ghosn scandal

March 1, 2022 GMT
Former Nissan Motor Co. executive Greg Kelly speaks during an interview in Tokyo, on Feb. 24, 2022. A Tokyo court will hand down a verdict Thursday, March 3, 2022, in the criminal trial of Kelly, an American and former executive at Japanese automaker Nissan. Kelly was charged with financial wrongdoing in under-reporting the compensation of Carlos Ghosn, his former boss and Nissan ex-chairman. (Kyodo News via AP)
Former Nissan Motor Co. executive Greg Kelly speaks during an interview in Tokyo, on Feb. 24, 2022. A Tokyo court will hand down a verdict Thursday, March 3, 2022, in the criminal trial of Kelly, an American and former executive at Japanese automaker Nissan. Kelly was charged with financial wrongdoing in under-reporting the compensation of Carlos Ghosn, his former boss and Nissan ex-chairman. (Kyodo News via AP)
Former Nissan Motor Co. executive Greg Kelly speaks during an interview in Tokyo, on Feb. 24, 2022. A Tokyo court will hand down a verdict Thursday, March 3, 2022, in the criminal trial of Kelly, an American and former executive at Japanese automaker Nissan. Kelly was charged with financial wrongdoing in under-reporting the compensation of Carlos Ghosn, his former boss and Nissan ex-chairman. (Kyodo News via AP)
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Former Nissan Motor Co. executive Greg Kelly speaks during an interview in Tokyo, on Feb. 24, 2022. A Tokyo court will hand down a verdict Thursday, March 3, 2022, in the criminal trial of Kelly, an American and former executive at Japanese automaker Nissan. Kelly was charged with financial wrongdoing in under-reporting the compensation of Carlos Ghosn, his former boss and Nissan ex-chairman. (Kyodo News via AP)
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Former Nissan Motor Co. executive Greg Kelly speaks during an interview in Tokyo, on Feb. 24, 2022. A Tokyo court will hand down a verdict Thursday, March 3, 2022, in the criminal trial of Kelly, an American and former executive at Japanese automaker Nissan. Kelly was charged with financial wrongdoing in under-reporting the compensation of Carlos Ghosn, his former boss and Nissan ex-chairman. (Kyodo News via AP)

TOKYO (AP) — A Tokyo court will hand down a verdict Thursday in the criminal trial of Greg Kelly, an American and former executive at Japanese automaker Nissan. Kelly was charged with financial wrongdoing in under-reporting the compensation of Carlos Ghosn, his former boss and Nissan ex-chairman.

WHAT IS HAPPENING?

The presiding judge will read the verdict at the Tokyo District Court. A panel of three judges has heard the proceedings. The trial began in September 2020 and its last session was in October. Jury trials in Japan are only for murder and other more heinous crimes.

WHAT ARE THE CHARGES?

The charges center around a pay cut of about 1 billion yen ($10 million) a year that Ghosn voluntarily started taking from 2010. Kelly and Ghosn both were arrested in late 2018. The pay cut in effect halved his pay after disclosure of high executive pay became mandatory in Japan. Kelly and his lawyers say the compensation was never decided on or paid. The prosecutors argued it was promised and should have been reported. The unreported pay was recorded in documents seen by only a handful of Nissan officials and was never presented to or approved by the board. Kelly has said he never saw them.

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WHAT IS THE POSSIBLE PUNISHMENT?

Prosecutors have demanded two years in prison. The maximum penalty for violating the Financial Instruments and Exchange Act over eight years is up to 15 years in prison. Kelly says he is innocent. If he gets a suspended sentence, he won’t have to serve time and return to the U.S. The conviction rate in Japan exceeds 99%.

WHERE IS GHOSN?

Ghosn led a turnaround at Nissan Motor Co. after he was sent to Japan by Nissan’s French alliance partner Renault in 1999. He was admired in Japan as a star executive for years. Ghosn jumped bail in late 2019, fleeing the country for Lebanon, the country of his ancestry. Lebanon has no extradition treaty with Japan. Ghosn says he is innocent. He has been writing books and making movies from Lebanon.

SO WHY THE DOWNFALL?

Testimony during the trial, including by two Nissan executives who got plea bargains, highlighted fears that Nissan would lose its leverage in the alliance with Renault. Others in the company suspected Ghosn would be behind such a move. Ghosn has said he always defended Nissan’s interests. The relationship between Nissan and Renault remains unchanged. Renault owns 43% of Nissan, while Nissan, which makes the Leaf electric car and Infiniti luxury models, owns 15% of Renault.

AND WHO IS KELLY?

Kelly was hired by Nissan in the U.S. more than 30 years ago, before Ghosn joined the company. He oversaw legal affairs and human resources. In 2012, Kelly became the first American on Nissan’s board. At the time of Kelly’s arrest he was in semi-retirement in Tennessee. He was lured into returning for what Nissan said was a business meeting. Kelly told The Associated Press he was only trying to retain Ghosn in legal ways. “It should have been resolved at the corporate level at Nissan. It’s not a criminal matter,” he said.

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Yuri Kageyama is on Twitter https://twitter.com/yurikageyama