Nissan seeks ¥1.4 billion in damages from former Carlos Ghosn aide Greg Kelly

YOKOHAMA – Nissan Motor Co. has filed a lawsuit against its former executive Greg Kelly seeking about ¥1.4 billion ($11.7 million) in damages, accusing him of helping former CEO Carlos Ghosn underreport his remuneration, people familiar with the matter said Friday.

The case was lodged with the Yokohama District Court on Jan. 19 before Kelly, an American lawyer who was Ghosn’s right-hand man as a Nissan representative director, was given a six-month suspended jail sentence for falsifying the automaker’s financial report for fiscal 2017. The first hearing is scheduled on May 12.

Nissan claims in the lawsuit that Kelly had considered ways to avoid disclosing some of Ghosn’s remuneration in its financial documents submitted to regulators.

Japan’s third-largest automaker argues that it was done on Ghosn’s instructions and Kelly did not correct the papers even though he was aware since 2010 that his pay was misstated.

Nissan was slapped with a ¥2.42 billion fine from Japan’s financial watchdog in February 2020 for underreporting the remuneration of Ghosn and other executives for years.

“We will pursue necessary responsibility of our former chairman and others for their wrongdoings,” a Nissan representative said. “Kelly, the defendant, was also involved, thus we filed a lawsuit.”

A lawyer for Kelly said all of his actions during his time with Nissan were intended to benefit the company, so that “there is no reason for him to be sued for damages.”

Kelly was arrested in 2018 and was indicted for conspiring with Ghosn in understating his remuneration by around ¥9 billion over eight years through March 2018.

On March 3, the Tokyo District Court handed him the jail sentence, suspended for three years. But it found the 65-year-old not guilty on other counts concerning its financial reports covering the previous seven years.

The ruling was widely seen as a defeat for the prosecutors, which had sought a two-year prison term for Kelly, who has since returned to the United States.

The district court on the same day ordered Nissan to pay fines of ¥200 million, the same amount that prosecutors had demanded, for submitting inaccurate financial statements for fiscal 2011 through 2017 to regulators.

Both Kelly and the prosecutors have appealed the ruling, while Nissan decided not to do so.

In February 2020, Nissan also filed a lawsuit against Ghosn seeking ¥10 billion in damages with the Yokohama District Court after the one-time corporate star jumped bail and fled to Lebanon from Tokyo.

Correction: An earlier version of this story incorrectly said that Greg Kelly was being sued by Nissan following his conviction for helping former CEO Carlos Ghosn underreport his remuneration.