TOKYO — Shortly before Thanksgiving 2018, American auto executive Greg Kelly got an urgent message saying he was needed in Japan for important business at Nissan Motor Co., where he was a director.
Kelly initially balked at the idea. The longtime Nissan human resources executive was at home outside Nashville, preparing for the holiday and a spinal surgery that was scheduled for shortly thereafter. But he acquiesced when the company offered to dispatch a chartered jet to pick him up.
Only after the plane landed in Tokyo on Nov. 19 did Kelly realize the trip was a ruse. Prosecutors arrested him that night and took him to jail in a coordinated swoop that also netted his then-boss, Nissan Chairman Carlos Ghosn.
Nearly two years later, Kelly's closely watched criminal case came to trial last week, and the man accused of colluding with Ghosn to hide about $86 million in deferred compensation is fighting back. Also on trial is Nissan Motor Co. itself. And as executives and companies around the world watch the outcome, so is the business culture of Japan.
For Nissan, the Tokyo trial could bring some closure to a corporate scandal that convulsed the automaker and ruffled its 20-year alliance with French partner Renault.
For Japan, the trial turns an unflattering spotlight on its society, its legal system and its attractiveness as a place to do business.
For Kelly, who turned 64 the day his trial began, Tuesday, Sept. 15, the case will decide whether he returns to the U.S. as a free man or spends perhaps the next 10 years in a Japanese prison.
The crux of the case is whether money earmarked for Ghosn for after retirement was decided each year as part of his overall compensation or whether it was a separate pool of money to keep him on board with Nissan after retirement, perhaps as an adviser. If the funds were actually part of his compensation while he was CEO and chairman, Nissan would have been required to report them in its financial reports. It did not.
Prosecutors maintain the funds were indeed part of Ghosn's compensation and that Kelly orchestrated how they were handled. In his defense, Kelly maintains that Ghosn's post-retirement compensation plans had not been decided or finalized and, more significantly, that Kelly was not even involved in arranging all of them. Other Nissan executives had a hand as well, he says.