Carlos Ghosn Photo: AP file
crime

Ex-Nissan exec says automaker sought to hide Ghosn's pay

45 Comments
By YURI KAGEYAMA

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45 Comments
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So let me get this straight. Every Nissan executive is off the hook on every count and the one lone foreign executive, Greg Kelly, gets stuck holding the bag??? If you are following this trial at all you can see that Kelly clearly had nothing to do with the things being alleged. What a joke the Japanese legal system appears to be.

0 ( +0 / -0 )

@Kei Kurono

That...that...?!

Is irony, right?!

You don't really think that, right?

3 ( +3 / -0 )

Japan has done a good work in disposing racist foreign hijackers out from Nissan, hope for Nissan's success in future.

-6 ( +0 / -6 )

Looks like Ghosn the criminal forced Nissan to not disclose pay just to save himself from getting too much attention in Japan for getting extra salary which other japanese companies CEO are not getting.

-5 ( +0 / -5 )

Now we know that Ghosn is not guilty of hidding any income.

In a healthy Justice System Toshiyuki Shiga, Hari Nada, Hiroto Saikawa and Toshiaki Ohnuma would be submitted to public trial to determine their level of responsibility.

1 ( +3 / -2 )

Unlike some people who have posted here, I don't automatically assume someone's guilt without all the evidence, which no one here has. I don't feel Ghosn used Nissan as a "piggy bank" or dishonestly hid anything. 

I don't assume he is guilty of a criminal offence, but from what has been made public he definitely was doing thigs that could colloquially be described as using Nissan as a personal piggy bank. Among other things these include:

Using Nissan funds to purchase and renovate homes for himself in Brazil and Lebanon;

Having Nissan pay his sister an annual salary for a fictitious advisory position, while also paying for her apartment;

Misappropriating Nissan funds by funnelling them to a company he owned personally;

Transferring his own personal losses from currency investments onto Nissan's books

The list goes on. These is over and above the question of whether Nissan failed to disclose his actual annual income.

I am NOT saying that he should have been arrested and charged with criminal offences for this, the proper remedy would have been for Nissan to sue him and him to compensate it for that. But what I am saying is that he did a lot of shady stuff and I'm not a huge fan of him, despite agreeing with the denunciations of the prosecution.

Kelly on the other hand I have WAY more sympathy for because he wasn't engaged in any of these types of shenanigans and is basically the fall boy for both Ghosn and prosecutors.

He gave money back for Christ's sake. 

Yeah, he gave some money back after he was caught and knew that he would have to pay it back anyway.

-4 ( +0 / -4 )

@ serendipitous1,

I agree. Unlike some people who have posted here, I don't automatically assume someone's guilt without all the evidence, which no one here has. I don't feel Ghosn used Nissan as a "piggy bank" or dishonestly hid anything. He gave money back for Christ's sake. I base this off what I have read so far, so I could be wrong. If Ghosn was all about making himself richer, why not take the offers from other companies, especially when you're talking millions of dollars more a year. I have spoken with several Japanese acquaintances about this case. Some don't care and others say he has to be guilty because he was arrested. From what I have read, there appears to be preferential treatment for Japanese associates/executives, as none of them are being prosecuted. If any one here believes that Ghosn and Kelly perpetrated these suspected crimes, all by themselves, then you are very closed minded. Close mindedness does not make a problem go away nor does it fix the problem. There is a problem in Nissan that needs to be fixed.

1 ( +3 / -2 )

Ghosn gave back $10 million (half his salary) each year? Doesn't sound like someone who is stealing money from a company......

6 ( +8 / -2 )

I have said from the start, this case must have Japanese involvement. We are missing only saikawa.

3 ( +4 / -1 )

Any foriegn company, wherever it is based should think twice about about any partnership or joint-venture with a Japanese company. The question now is "Can Japanese people be trusted"?. We all know that the Japanese legal system cannot be trusted.

Japanand it's legal system is just one big scam, but this scam has gone horribly wrong for Japan. Will Japan ever be seen in the same way again?

9 ( +10 / -1 )

I agree though that not a single Yen of taxpayer money should be spent on the case though, the proper remedy would be for the shareholders to sue, not for the government to prosecute.

Well and truly in agreement there!

Complying with this rule just involves filling in another section of a disclosure form

Yeah, but you know, people don't want their dirty laundry hung out for all to see.

It would have been an option to simply abide by the new rule and open his trench coat for all to see, but this being Japan, apparently would upset the locals and especially those who previously lost their jobs when Ghosn restructured the firm.

So trying to work around such rules in a legal way is what most try to do, and seemingly Nissan was no different except they decided that they wanted to throw Ghosn and Kelly under the bus and use this as the means to do so.  

It is similar when governments hike top tax brackets. Suddenly people in the top tax bracket find a way to be paid no more than the threshold, but the problem I have with that is that it takes their time away from focusing on productive work. I'd rather let them just have their money and they focus on doing their best work without the distraction created by the misincentive.

the only reason it became an issue with Ghosn is because he wanted to dishonestly hide how much he was making 

I'm not sure there was any dishonesty involved. I think they were trying to do things legally.

Fair point. But that has less to do with the rule itself, which is quite easy to comply with and no other company has had issues with, and more to do with a lethal combination of Ghosn's greed on the one hand and prosecutors running out of control on the other.\

Yeah, but my angle is more subtle - the rule itself creates the sorts of incentives that don't really get the nation ahead.

But thank you for the counterpoints, maybe I should be caring more about how much global CEOs are paid...

1 ( +3 / -2 )

The owners can surely ask for the information themselves, or remove the said CEO if they don't like the response though.

Not in a large publicly traded company like Nissan, which has a huge number of dispersed shareholders and no single owner powerful enough to do that, which is why this rule only applies to publicly traded companies and not private held ones.

As an owner of some shares, and a tax payer, I feel more robbed by the tax money that is going down the drain in trying to litigate all of it, 

Its important to note that he hasn't been charged in connection with the disclosure rule, but rather for breach of trust. I agree though that not a single Yen of taxpayer money should be spent on the case though, the proper remedy would be for the shareholders to sue, not for the government to prosecute.

as a share holder, I'd prefer my CEO's not be distracted from their business by sideshows forced upon them because of meddling rules like this one.

Complying with this rule just involves filling in another section of a disclosure form that publicly listed companies have to file anyway, this isn't something that CEOs are involved in themselves (the only reason it became an issue with Ghosn is because he wanted to dishonestly hide how much he was making in the first place and not because complying the disclosure rule was in any way burdensome).

Well I'm not a shareholder of any Japanese company let alone Nissan, but if I were a Nissan shareholder I'd be longing for the days before this whole kerfuffle over his pay and all the horrible fallout for all involved.

Fair point. But that has less to do with the rule itself, which is quite easy to comply with and no other company has had issues with, and more to do with a lethal combination of Ghosn's greed on the one hand and prosecutors running out of control on the other.

-2 ( +1 / -3 )

The reason for the rule is that the owners of such companies (shareholders) need to know how much the executives running them ostensibly on their behalf are paying themselves.

The owners can surely ask for the information themselves, or remove the said CEO if they don't like the response though.

The Ghosn case if anything demonstrates why this rule exists in the first place.

As an owner of some shares, and a tax payer, I feel more robbed by the tax money that is going down the drain in trying to litigate all of it, and as a share holder, I'd prefer my CEO's not be distracted from their business by sideshows forced upon them because of meddling rules like this one.

he would have been able to keep fleecing the shareholders for as long as he wanted since they would have had no legal way of even knowing about it in the first place.

Well I'm not a shareholder of any Japanese company let alone Nissan, but if I were a Nissan shareholder I'd be longing for the days before this whole kerfuffle over his pay and all the horrible fallout for all involved.

For me, all the standard financial reporting would be sufficient information.

0 ( +3 / -3 )

That is, Government inserting itself employment matters between an employee, Mr. Ghosn, and the company that is Nissan.

If Japan's government were not meddling in such affairs in the first place (did the voters ever even demand this? not that I recall), none of this whole episode would have happened.

In the end, it works as a distraction from issues that count in moving Japan forwards, and the whole ridiculous story is costing us tax payers MILLIONS.

What was wrong with Ghosn making whatever companies wanted to pay him? Why was government inserting itself in to those relationships, and how much has it cost us all?

The rule in question requires publicly listed companies to disclose compensation paid to executives earning in excess of 100 million Yen per year.

The reason for the rule is that the owners of such companies (shareholders) need to know how much the executives running them ostensibly on their behalf are paying themselves. Its not an arms length transaction between the company and an executive when the executive in question controls the company and may abuse that position to pay himself whatever he wants while keeping the owners in the dark.

The Ghosn case if anything demonstrates why this rule exists in the first place. While I'm not a fan of the way the criminal justice system has treated him, the fact is that Ghosn really was treating Nissan as his personal piggy bank and without rules like that he would have been able to keep fleecing the shareholders for as long as he wanted since they would have had no legal way of even knowing about it in the first place.

-1 ( +2 / -3 )

This whole episode stems back to this:

compensation disclosure requirements in 2010

That is, Government inserting itself employment matters between an employee, Mr. Ghosn, and the company that is Nissan.

If Japan's government were not meddling in such affairs in the first place (did the voters ever even demand this? not that I recall), none of this whole episode would have happened.

In the end, it works as a distraction from issues that count in moving Japan forwards, and the whole ridiculous story is costing us tax payers MILLIONS.

What was wrong with Ghosn making whatever companies wanted to pay him? Why was government inserting itself in to those relationships, and how much has it cost us all?

0 ( +3 / -3 )

Nothing like a foreign scapgoat. So easy to identify and easy to convict. Should be careful as the rage of St. Patrick might just protect a man called Kelly. St Patrick drove the snakes out of Ireland and perhaps a few made it to Japan. Such a lovely country with such lovely maners unless you get caught up in their legal system

3 ( +6 / -3 )

Pathetic justice system, where is the evidence that exonerates these Japanese executives and where is the evidence convicting the two foreigners?

9 ( +11 / -2 )

Mark my words: This story will soon be buried. This story will soon be a thing of the past. Everyone will only remember how the Gaijin was guilty. The fresh news will be hidden very soon. You will not be able to follow this story in Japan because Japan, Inc. understands that this makes things look very bad for them now. But, who will remember?

Well then the foreign media will have to do EVERYTHING in its power to make sure that Japan is and continues to be ridiculed on a global stage for all these committed atrocities.

6 ( +8 / -2 )

he did not mention the American's role in his testimony.

Isn't that the whole point of the trial? No wonder these things take long..

2 ( +4 / -2 )

I am only reading this story here, why isn't this story being widely and comprehensively reported

on mainstream T.V with law experts like former Tokyo prosecutor Gohara that are not scared to call

a spade a spade.

called to speak how the prosecutors don't really have a case. Well it will make the Nissan and the

prosecutors look bad.

8 ( +10 / -2 )

the whole point of this corruption is Nissan being Japanese employees were involved in the coverup

will these Japanese also be detained and questioned indefinitely for their involvement!?

Justice is blind in Japan, as long as your Japanese , gaijin then its eyes wide open

5 ( +7 / -2 )

Remember the other top executive is on the lam and unavailable for a trial.

Yup. And all the other ones are just sitting around in Japan conspicuously not facing any consequences whatsoever for their involvement. Except Kelly who, as far as I can see from the evidence presented, had almost nothing to do with the acts complained of.

7 ( +9 / -2 )

Mark my words: This story will soon be buried. This story will soon be a thing of the past. Everyone will only remember how the Gaijin was guilty. The fresh news will be hidden very soon. You will not be able to follow this story in Japan because Japan, Inc. understands that this makes things look very bad for them now. But, who will remember?

9 ( +12 / -3 )

Of all the top executives at Nissan he seems to have been one of the least involved in any of this, yet he is the only one being tried.

Remember the other top executive is on the lam and unavailable for a trial.

-5 ( +3 / -8 )

Shiga said Ghosn had total power to decide on the amount and method of his payment. Apart from confirming a post that Kelly had held he did not mention the American's role in his testimony.

Its an absolute outrage that Kelly is on trial for this. Of all the top executives at Nissan he seems to have been one of the least involved in any of this, yet he is the only one being tried.

11 ( +14 / -3 )

So the Japanese former executives admits formal guilt and walks free.

And still no proof that show in any way that Goshn knew the way he was paid was illegal. How could he since he does not read Japanese ? Some accountant did the job for him.

I know that because I was filling a piece of paper innEnglish too that was saying I validate the amount I was officially paid in Japan. How a foreigner could know in his case he pays all what is required innview of Japan fiscal system ?

Also it is totally fake news that he could decide on his own the amount he was willing to be paid.

There is a board for that, so there is no "king" in a private company with full powers. He asked for it and got paid by acceptance from Nissan, without possibly knowing Nissan (his Japanese executive counterparts) was hiding the truth from him That is the true story revealed.

5 ( +8 / -3 )

Huh? why is Toshiyuki Shiga testifying in Kelly's case? they didn't even work together for longer than a year? seems like Japanese prosecutors are trying Ghosn's case and not Kelly's

11 ( +13 / -2 )

It may well be that the powers that control Japan Inc and the LDP did not want to see the execs of Japanese corporations paid on a par with their US or European counterparts bucause it would have made them more powerful than politicians in some regard. While as businessmen they are of course about profit, but they are all about maintaining power and control.

9 ( +11 / -2 )

Seems as though this is atrial about Ghosn instead of Kelly.

17 ( +20 / -3 )

A non guilty verdict would exonerate Ghosn, the Tailors, and the Turkish crew.

It just can't happen.

The judge will convict him and retire.

14 ( +17 / -3 )

They are telling me that the company has been hiding his pay for decades. Furthermore, a company, that should have an incredible amount of oversight is claiming that they were held hostage by the only two foreigners? Moreover, audits are mandatory and during decades of auditing and countless accountants, not one person stumbled unto this information nor reported it until Ghosn made plans to merge the company more with Renault making it less Japanese owned? The timing of everything doesn't make sense. Nissan always wanted to decrease the French ownership of the company and when Ghosn forced their hands, they sent the law after him.

17 ( +20 / -3 )

Now that Toshiyuki Shiga has retired, after years on full pay and no doubt a handsome retirement package, he decides to confess part of Nissan's role in the reporting of salaries, after watching the whole saga of the arrest, jail and escape.

Why now?

And how many other Nissan executives are also involved in these shenanigans?

Looks like the case is starting to fall apart, or they'll need a bigger courthouse to accommodate all the Nissan execs who could stand trial.

16 ( +20 / -4 )

Here it is! What I was saying! Nissan did it and then blamed it on Ghosn! And the prosecutors are working for Nissan continuously spreading their lies. They tried torturing Ghosn to get him to confess, but he escaped and now the truth is starting to come out!!! How embarrassing, complete loss of face for Nissan and Japan's legal system (if you can call it that)!!!

19 ( +22 / -3 )

cat.... pigeons....

2 ( +6 / -4 )

Key takeaway from Shiga's testimony, "failure of the company's governance." 'nuff said...Ghosn outplayed you and you lost face, that's what this is about.

14 ( +17 / -3 )

So they didn't want to let him go, and manipulated loop holes, then closed those loopholes hoping to quietly lock him up for using the loopholes they suggested. If anyone had criminal intent it was the Japanese managers. They can never admit as the loss of face would collapse the system. Best to incarcerate foreigners it's all their fault?

Ohhh didn't think that through, now both the Buisness systems and the legal system are ridiculed. And justifiable too. But the Kamakazi mentality will insure no loss of face and a warm feeling of sacrifice. Good luck with that.

16 ( +19 / -3 )

The truth doesn't matter.

Kelly is gonna be convicted, no doubt of it.

18 ( +21 / -3 )

Any normal, judge in any normal judicial system would end this pathetic charade of a so-called trail right now.

Oh, but I forgot (pardon me), this is Japan. The prosecutor is the judge, and he only sides with Japanese interests.(It is worth moting that in Japan rhe prosecutors office have two seperate departments, prosecutors for foriegners and prosecutors for Japanese).

Hostage takers are cowards, but sadly no dares challenge the filth of Kasumigaseki (Tokyo DIstrict Prosecutor s Office).

24 ( +29 / -5 )

A former Nissan chief operating officer outlined in a Japanese court Tuesday the pains company officials took to hide star executive Carlos Ghosn’s pay, and how they had worried about his quitting for a rival.

“Carlos Ghosn is a world-class business leader and CEO,” said Toshiyuki Shiga, testifying at the trial of his former colleague Greg Kelly, charged with under-reporting Ghosn’s compensation.

“We heard not only as rumors but as fact that he was getting job offers,” Shiga added.

He did, and yet he loyally stuck with them and they stabbed him in the back. Typical.

24 ( +28 / -4 )

So, Nissan was hiding his pay and not Mr Ghosn himself?

What revelations!

31 ( +34 / -3 )

He forgot to add ..

"and everyone was fine with that until the merger with Renault was proposed"

32 ( +36 / -4 )

There , finally a little bit of clarity.

Loosing him to competition was a problem so they ambushed him in schemes that were illegal.

But isn't this a bit genius ? Ghosn now can't work for any company.

Nissan exploited the Japanese legal system in such a beautiful way for almost free and solved their problem.

There are now 2 big automakers and 3 countries trying to understand the Japanese income tax system before any of this can move forward.

So next time a company approaches you with a dodgy payment methodology think twice.

18 ( +24 / -6 )

Really? So Nissan is hiding the truth after all? An interesting tidbit of information. Tell me more.....?

28 ( +33 / -5 )

The witch hunt is being gradually revealed.

32 ( +39 / -7 )

A company of a million Japanese and two foreigners and the two foreigners get arrested. No discrimination here, move on...

41 ( +50 / -9 )

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