Former Nissan CEO Greg Kelly has been sentenced to six months probation in Japan in connection with the Carlos Ghosn affair.

The Tokyo District Court found Kelly guilty of helping Ghosn hide earnings from the public and shareholders.

The American Kelly was arrested in November 2018 immediately after entering Japan and has since been held in prison in Japan and later released on bail.

At the turn of the year 2018/19, Ghosn avoided criminal proceedings in Japan by spectacularly fleeing to Lebanon.

Patrick Welter

Correspondent for business and politics in Japan based in Tokyo.

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The company accused at the same time, Nissan Motor, was fined 200 million yen (1.6 million euros) for concealing Ghosn's income.

Nissan has never denied the allegations.

Prosecutors had asked for a two-year prison sentence for 65-year-old Kelly.

She accuses Ghosn and Kelly of concealing income of around 1 billion yen (7.8 million euros) a year in the eight years up to fiscal year 2017 and not publishing it in the annual report.

The background is that in 2010 Japan obliged listed companies to include manager salaries of more than 1 billion yen in their annual reports.

No extradition treaty

Witnesses testified in court that the then Nissan boss Ghosn roughly halved his annual salary afterwards.

Ghosn wanted to avoid public trouble.

According to the prosecutor's office, the Nissan boss commissioned Kelly and other subordinate managers to look for ways in which he could later receive the corresponding income from Nissan in other ways after retirement.

Ghosn and Kelly argue that such mind games were engaged in.

However, Nissan had not entered into any legal obligation to make future payments and was therefore not required to make any disclosures.

Kelly justified the considerations by saying that he wanted to keep the top manager Ghosn, who was coveted by other companies, for Nissan.

The court acquitted Kelly of the allegations for fiscal years 2010 to 2016.

However, he was guilty in fiscal 2017 when Ghosn received discounted stock options.

This means that income of 750 million yen (5.8 million euros) has not been published.

According to the judge, Toshiaki Ohnuma, who took care of the payments to Ghosn as an employee of the chief secretary, was partly responsible for the other hidden income.

Ohnuma testified for the prosecution in exchange for immunity.

An American attorney for Kelly described Wednesday's verdict as an attempt by the Japanese government to save face in the face of a lack of evidence against his client.

After three long years for the Kelly family, this chapter is closed, said the American Ambassador to Japan, Rahm Emmanuel.

The criminal verdict on the financial offenses is the first and likely the last to be handed down in Japan in connection with the Ghosn scandal.

Ghosn fled to Lebanon.

The country has no extradition treaty with Japan.

Civil claims for damages are pending by Nissan against Ghosn.

Escape in a box

Ghosn is criminally charged in Japan not only with concealing income, but also with embezzling money from Nissan.

He denies all allegations and accuses Nissan and the Japanese government of a conspiracy.

They wanted to get rid of him to prevent a feared merger between Nissan and its partner Renault.

Two Americans, Michael Taylor and his son Peter, were sentenced to two years and one year and eight months in prison in Japan in July 2021.

They helped Ghosn flee the country in 2018.

Ghosn was then taken out of the country on a private plane in a box for music equipment.

In Turkey, where the plane landed, two pilots and the manager of a private airline were convicted of smuggling migrants.

The case had led to considerable unrest in the international business community in Japan.

Allegations of hostage justice were leveled against Japan.

Ghosn had led Nissan for around twenty years and saved Renault from bankruptcy on behalf of its alliance partner.

For many years he was therefore considered a hero in Japan.

But then around five years ago, French pressure on Nissan increased and Japan feared that Renault might take over Nissan completely.

For Nissan itself, the scandal has so far had a rather detrimental effect.

Many foreign managers left the company, which started making losses again.

In the three-way alliance with Renault and Mitsubishi Motors, the companies are trying to regain their former strength.