The first hearing in the trial of Nissan Motor Co. and former representative director Greg Kelly over the alleged underreporting of former Chairman Carlos Ghosn's remuneration will be held at the Tokyo District Court on Tuesday.
Kelly and Nissan have both been indicted for violating the Financial Instruments and Exchange Law.
A fierce court battle is expected to be fought between the prosecution and Kelly, 63, who claims his innocence. With Ghosn, 66, having fled to a foreign country, the trial is advancing in his absence and is expected to be protracted.
Kelly reportedly told his lawyer that he wants to be found not guilty -- and quickly -- and return to the United States. He currently lives in a house in Tokyo in compliance with the conditions set for his bail. He is said to be spending his time jogging and reading through materials for the trial.
Kelly had been living in the United States when he was requested by Nissan to attend a board of directors' meeting slated for Nov. 19, 2018. Shortly after he arrived in Japan, he was arrested. The prosecution accuses him of understating Ghosn's remuneration as a director by about 9.1 billion yen -- in conspiracy with Ghosn -- by falsifying the company's securities reports. The underreporting is alleged to have happened over eight years, from the fiscal year ending March 2011 to that ending March 2018.
Prosecutors claim that while Ghosn was actually entitled to about 17 billion yen over the eight years, the total sum entered in the securities reports was only about 7.9 billion yen, an amount that had already been paid, thus concluding that both Ghosn and Kelly concealed the "unpaid remuneration." The prosecutors believe that this was intended to prevent the more than 1 billion yen Ghosn was paid annually from being made public, and that close aide Kelly allegedly considered ways to transfer the unpaid amounts to Ghosn in future, under his instructions.
The defense's counterargument is that Ghosn's remuneration was exactly as entered in the securities reports, with no such "unpaid remuneration" existing. His lawyer is expected to claim that Kelly did not conspire with Ghosn, by saying that he considered the payment to be a kind of compensation that Ghosn would receive upon assuming a new post following his resignation as chairman. Therefore, the biggest issue of contention will be whether or not the 9.1 billion yen can be considered remuneration in arrears.
On the other hand, Nissan Motor admits to the charge, but is expected to ask for commutation of the financial penalty by saying that these were offenses committed solely by the defendants, including Ghosn.
The district court has set a total of 76 trial dates until July next year, with the court ruling to be made further down the road.
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