Nada's testimony in the Tokyo courtroom sheds light on why the close Ghosn aide flipped on his boss. It painted a picture of a man waffling on getting authorities involved until his hand was forced to save his own skin.
Nada said he knew removing Ghosn, who saved Nissan from bankruptcy in 1999 and forged its alliance with French partner Renault over nearly two decades, would trigger tumult at Nissan and the alliance.
"It would be terrible for the company," said Nada. "When the company's CEO is found to do bad things, it's the company that has done bad things."
But in the final analysis, he said, "the priority was to stop these things from happening."
Nada's testimony also painted the fullest picture yet of the allegations against Kelly. Nada asserted that Kelly instructed him to help devise ways to pay Ghosn millions in a post-retirement package that would help cover shortfalls in his annual compensation, something Nada described as Ghosn’s “haircut."
Prosecutors allege Ghosn and Kelly conspired to hide more than $80 million in deferred payment owed Ghosn after retirement. The money, prosecutors say, should have been disclosed in the company's annual reports. But they charge that Ghosn wanted to avoid public scrutiny of his supersize salary in Japan and France and conspired with Kelly to hide the tens of millions from public view.
Kelly and Ghosn were arrested the same day after landing in Japan on separate flights. Both deny the charges. But Ghosn fled Japan in December 2019 to seek refuge in Beirut, beyond the reach of Japanese law. Kelly, left alone to stand trial, could face up to 15 years in prison if found guilty.
Prosecutors allege Ghosn's underlings began scrambling to hide his pay in 2010, the year Japan changed its corporate reporting rules to require companies to disclose individual executive pay packages of more than ¥100 million ($962,000) a year.
The trial began last September, but Kelly won't have a chance to speak in his own defense until he takes the stand this spring. The trial is expected to end in July.
Kelly's defense maintains that he was not directly involved with many of the remuneration discussions. Moreover, the payment methods Kelly pursued were framed as incentives to compensate Ghosn for future services to the company, not work already rendered. The goal, the defense says, was to retain Ghosn's talent after he retired so he wouldn't defect to a competitor.
Kelly's defense also rests on the argument that those payouts were never decided. Thus, any agreements were not legally enforceable and there was no obligation to report them.