Ex-Nissan legal chief faces a two-year sentence, according to Japanese prosecutors.

Japanese prosecutors called on the Tokyo District Court to hand a two-year prison sentence to Nissan’s former legal affairs head for the part he allegedly played in a “conspiracy” to conceal the true pay of its former chair, Carlos Ghosn.

Prosecutors accused Greg Kelly, a 30-year veteran of Nissan, of overseeing a system of “backdoor remuneration” for Ghosn, who evaded what would have been a lengthy financial misconduct trial of his own by fleeing to Lebanon in a private jet.

The custodial demand, which was lighter than some had expected, concluded the prosecutors’ final arguments in a trial that has involved dozens of testimonies, has reduced witnesses to tears and is unlikely to receive a verdict for several more months.

Following Ghosn’s escape, the trial of Kelly has appeared at times to have taken on proxy status for the case prosecutors would have mounted against Ghosn. The former chair has denied all charges against him.

Legal experts said that if the court followed the prosecutors’ recommendation and issued a two-year prison sentence, Kelly might walk free if judges decided that the nearly three years since his arrest that he has been either behind bars or on bail would be counted against the sentence.

On Wednesday, prosecutors also sought a fine of ¥200m ($1.8m) for Nissan, which has not disputed the charges levelled against the company. They cited the failure of governance as “a deep problem for such a socially significant company”. 

Kelly, who was arrested upon arrival in Japan on the same day as Ghosn in November 2018, has consistently denied the charges against him since the trial started last September. His lawyers have argued that he had been at pains to seek out a legal way of paying the former Nissan chair a salary generous enough to retain him in a hotly competitive market.

Prosecutors meanwhile contend that a line was crossed and that deferred remuneration that had, in effect, been promised to Ghosn should have been declared. The machinations surrounding Ghosn’s pay date from 2010 and a change that obliged the country’s highest paid business leaders to declare their remuneration. At the time, Ghosn was the highest-paid executive in Japan.

Supporters of Ghosn and Kelly believe that the charges against the two men were engineered by an “old guard” within Nissan that managed to weaponise the prosecutors’ office in an effort to bring down Ghosn before he could turn an alliance of Renault and Nissan into a full merger.

But in their closing arguments, prosecutors alleged that Kelly was “a central and proactive actor” in compiling a scheme that allowed Ghosn to understate more than ¥9bn in deferred remuneration that the former chair was set to receive over an eight-year period.

“You can say that Kelly was behind the efforts to hide Ghosn’s income,” the prosecutors said. “Kelly sought to distance himself from the events and has shown no remorse for his actions.”

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