The contradictory versions of Carlos Ghosn on trial in a Tokyo courtroom

After eight months laying bare one of the world’s biggest automotive alliances, a Tokyo court is homing in on a pivotal question: was Carlos Ghosn a leader that Nissan could not afford to keep, or could not afford to lose?

The man actually on trial in the Tokyo District Court is Greg Kelly, a grey-haired Tennessee lawyer who worked at Nissan for 30 years before his 2018 arrest on charges of conspiring to conceal the true scale of Ghosn’s pay by $87m.

But as the trial has progressed, prosecutors and defence have focused ever more forensically on Ghosn. The former Nissan chair would have been in the dock himself if he had not fled Tokyo for Lebanon in 2019. 

That focus on the absent Ghosn has presented the court with two diametrically opposed images of the man.

The prosecutors, through testimonies that have ranged from former top executives to relatively low-level employees, have depicted Ghosn as a feared autocrat. According to witnesses, Ghosn’s word within Nissan was law, his greed was out of control and his plans would ultimately harm Nissan. 

One of them, offering testimony from behind an opaque screen, told the court that in her 10 years working for Ghosn she had gone from believing he was surrounded by a “special aura” to thinking he was motivated by greed. “I’m not sure if obsessed is the right expression,” said the witness. 

This version of Ghosn, according to prosecutors, was a man who would naturally order Kelly to construct a mechanism to conceal the size of his salary if it suited his ambition to maintain a particular image in France and Japan.

Kelly’s team, meanwhile, has presented Ghosn as an executive upon whose future Nissan absolutely depended. As the company lurched from crisis to crisis, including the aftermath of the 2011 Tohoku earthquake and tsunami and the wrongful sacking of Renault staff on suspicion of corporate espionage, Ghosn became an ever greater “retention risk”. 

Nissan was very worried that Ghosn would join a rival company, and would probably take a significant number of executives with him if he did, Kelly told the court. 

Kelly’s testimony has challenged the idea that Nissan executives were fearful that Ghosn would force the Japanese company into ever greater compromises with its French partner Renault. The main motive behind retaining him, said Kelly, was to “provide his services to Nissan and protect Nissan’s independence from Renault”.

Greg Kelly’s legal team says Nissan’s future depended on retaining Ghosn’s services © AP

According to Kelly and other former Nissan executives, concerns over Ghosn’s retention intensified after his pay was reduced to address a change in Japan’s rules on compensation disclosure introduced in 2010. Ghosn, who was one of the most highly paid executives in Japan, feared that the disclosure of his full salary would cause a public backlash and demotivate employees at Nissan. 

The central question for the judges is whether Ghosn instructed Nissan executives to find ways of paying him what he expected but only declaring the reduced amount, or whether the company came up with a new remuneration scheme on its own because it feared losing its chief executive. A crucial additional question is whether he would actually have provided services for his post-retirement compensation.

In January Toshiyuki Shiga, Nissan’s former chief operating officer, testified that he was told by Ghosn to think of ways to receive the unpaid remuneration after retirement. He took it as a directive from his boss even though he was aware of “the legal risk” of not disclosing it. 

The change in Japanese rules coincided with French government pressures to cut Ghosn’s pay and reduce his influence as chief executive of Renault, which is 15 per cent owned by the French state. Ghosn grew increasingly frustrated with both the French government and his pay, Kelly told judges last week. 

“There was a time in July or September that he was very seriously considering retiring at the age of 60 [March 2014],” the former head of legal affairs said. “If he retired at 60, he was still a young man and he could have a full-time role as the top executive at any auto company anywhere in the world.”

Worried that Ghosn would leave Nissan, Kelly said he consulted with Hiroto Saikawa, Ghosn’s handpicked successor as chief executive. They agreed that Nissan should consider a post-retirement payment for Ghosn through a non-compete and consulting arrangement. 

In February Saikawa, who stepped down as Nissan chief executive in late 2019, also said he shared the view that Ghosn had become a retention risk, adding that it was not surprising that “a person of such huge achievement” would be in high demand.

“His [Saikawa’s] view was that he was worth $100m over a period of years,” Kelly said. “Many of Nissan’s best ideas had come from Mr Ghosn. If he came up with two ideas worth $50m, and I knew he would, he would pay for the contract.”

According to excerpts from statements that Ghosn made to prosecutors, the former chair said he never asked for the post-retirement contract and he did not find the terms desirable so there was no formal agreement with Nissan on his deferred compensation.

The case continues. 

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