By Peter Landers
TOKYO -- Greg Kelly, the former Nissan Motor Co. executive charged with helping hide Carlos Ghosn's compensation as Nissan chief, pleaded not guilty Tuesday at the opening of his trial in Tokyo.
"I deny the allegations," Mr. Kelly said, speaking in a clear voice before a three-judge panel at the Tokyo District Court. "I was not involved in a criminal conspiracy."
Prosecutors allege that Mr. Ghosn, Mr. Kelly and Nissan underreported Mr. Ghosn's compensation by 9.2 billion yen, equivalent to $87 million, in company filings over eight years through 2018.
A Nissan representative standing next to Mr. Kelly pleaded guilty on behalf of the company, saying the prosecutors' allegations were correct.
The trial got under way nearly two years after Messrs. Ghosn and Kelly were arrested in Tokyo. Mr. Ghosn, who fled to Lebanon last December, wasn't present. But the trial will provide the closest thing to a legal judgment on the longtime Nissan leader, who was hailed as a hero in Japan for turning around the car maker only to wind up in a Tokyo jail.
Mr. Kelly defended his former boss in a statement he read to the court. He said Mr. Ghosn was an extraordinary executive who helped Nissan recover profitability and grow rapidly after it was near insolvency in the late 1990s.
Mr. Kelly said he studied ways to pay Mr. Ghosn more but considered only lawful ways.
The trial is set to last nearly 10 months, with a verdict not likely before the fall of 2021.
Mr. Kelly, who turned 64 on Tuesday, is an American lawyer who long served by Mr. Ghosn's side at Nissan. At the time of his arrest, he was semiretired and living in Tennessee. He held the title of Nissan representative director, which in Japan signifies an executive who is authorized to sign contracts on behalf of the company.
In court on Tuesday, prosecutors laid out in detail their allegations that Mr. Ghosn looked for ways to hide part of his compensation to avoid a public backlash starting in 2010. That was when Japan started requiring the disclosure of executive compensation greater than around $1 million.
Prosecutors said Messrs. Ghosn and Kelly made arrangements to pay a portion of Mr. Ghosn's compensation each year after his retirement and failed to report that portion on financial statements.
Incorrectly reporting executive compensation -- including compensation that is decided in a given year but not yet paid -- is a crime under Japanese law punishable by up to 10 years in prison.
Mr. Kelly told the court that any compensation Mr. Ghosn might have received after retirement would have involved substantial services and commitments during his postretirement period such as a noncompete agreement. "I always consulted with Nissan's attorneys and outside counsel" when discussing such plans, Mr. Kelly said.
All sides agree that Mr. Ghosn never actually received the money he is accused of failing to report. But a prosecutor told the court that Nissan executives including Mr. Kelly held discussions about Mr. Ghosn's future pay on the premise that he was certain to receive the payments.
Mr. Kelly's wife, Dee Kelly, sat in the front row of the courtroom gallery. Everyone in the room wore a face mask including Mr. Kelly, dressed in a gray suit with a red tie.
Mr. Ghosn was separately charged over several allegations that he abused Nissan's trust by directing company funds to people who helped him with his personal finances. He has denied the charges. Mr. Kelly doesn't face charges over those matters.
Write to Peter Landers at firstname.lastname@example.org