EXCLUSIVE: Document on Ghosn’s Post-Retirement Pay Created by Aide

November 26, 2018

Tokyo--A document showing post-retirement remuneration for former Nissan Motor Co. <7201> Chairman Carlos Ghosn may have been created by his close aide, Greg Kelly, a former representative director of the Japanese automaker, informed sources told Jiji Press on Monday.

The special investigation squad of the Tokyo District Public Prosecutors Office obtained this document and judged that the future payout should have been booked in securities reports, the sources said.

The prosecutors believe that a total of some 8 billion yen planned for the post-retirement pay for Ghosn was concealed between fiscal 2010 and fiscal 2017.

Ghosn, 64, and Kelly, 62, were arrested last week for allegedly understating the former chairman's executive pay by over 5 billion yen in total in securities reports over the five years through fiscal 2014, which ended in March 2015.

According to a source familiar with the situation, Nissan discovered the document in question during its internal investigation launched based on a whistleblowing report.

Kelly drew up the document after Japan introduced a system requiring listed companies to disclose names of their executives earning 100 million yen or more in remuneration, beginning with earnings reports for the business year ended in March 2010.

About half of Ghosn's actual annual remuneration totaling some 2 billion yen was shown in the document, without any description about the purpose of the payout, the source said.

The scheme was apparently aimed at preventing Ghosn's huge income from being disclosed under the mandatory system.

Kelly said after his arrest that the post-retirement remuneration was sort of consultant fees for Ghosn, that the specific amount of the future payout had not been decided and that the remuneration was not subject to the mandatory reporting, according to another source.

Kelly claimed that the remuneration was also designed to prevent Ghosn from engaging in operations of rival companies after his retirement, the source said.

Ghosn is suspected of ordering Kelly to report only some one billion yen as the former chairman's annual remuneration to escape criticism over his high executive pay, according to informed sources.

Ghosn is believed to have denied allegations against him during interrogations by the prosecutors.

Kelly told people close to him that Ghosn had never instructed him to underreport the pay of the then Nissan chairman, the sources said.  Jiji Press