(MENAFN- Asia Times) Nissan Motor has offered to settle a Carlos Ghosn-related class-action lawsuit filed by the Jackson County Employees' Retirement System in federal court in Nashville.
Carlos Ghosn, in an interview on Thursday afternoon, informed Asia Times and Wards Automotive that Nissan had agreed to settle with the Michigan-based investor group. The fugitive former Renault-Nissan executive didn't provide details of the proposed settlement, which still has to be approved by the judge.
But the new development in the case is that he said Nissan has agreed to pay the full amount of the settlement. That means that Ghosn and American former Nissan board member Greg Kelly, two of four defendants along with Nissan, will not be liable for any of the settlement costs.
In the case, the investor group claimed that Nissan and six former executives were responsible for the collapse of Nissan's business following the arrest of Ghosn in November 2018, which was triggered by an allegation that the defendants had failed to disclose 9.3 billion yen (US$84 million) in Ghosn retirement income between 2010 and 2018. It was not clear what amount of damages the group sought.
Nissan's agreement to settle has to be considered a victory for Ghosn and Kelly, albeit a small one. This is the first time Nissan has had to back down in one of its numerous litigations with Ghosn around the world .
Nissan and the Jackson County Employees' Retirement System asked the court on Monday, September 27, to“stay all deadlines” in anticipation of their filing a settlement agreement by early November, court documents show, and the judge accepted their petition on Wednesday, September 29.
The decision by Nissan to settle follows a series of requests for discovery documents from current and former Nissan executives by Greg Kelly's legal team. On their wish list were all seven individuals who plotted in secret for more than half a year to remove Ghosn from management.
Included on the Kelly lawyers' documents request list were Hari Nada and Toshiaki Ohnuma, Ghosn's and Kelly's main accusers; Hiroto Saikawa, Nissan's CEO at the time of Ghosn's ouster; Hidetoshi Imazu, the statutory auditor who reported his concerns about Ghosn to the prosecutors' office rather than to the company board; Hitoshi Kawaguchi, the executive overseeing government affairs; Masakazu Toyoda and Tomoo Nagai.
Toyoda, a former bureaucrat from the Ministry of Economy, Trade and Industry, and Nagai, who heads the board's audit committee, now serve as outside directors.
In Thursday's interview, Ghosn added Nagai to his list of people he alleges to have been conspirators. He had previously named all the others.
The Michigan-based investor group filed the case against Nissan and six senior executives including Ghosn, Kelly and Hiroto Saikawa on December 10, 2018, three weeks after Ghosn's and Kelly's November 2018 arrests in Tokyo and the same day that Tokyo prosecutors obtained their first charge against Ghosn and Kelly.
That number of executives was whittled to four: Ghosn and Kelly, Saikawa and Joseph Peter, Nissan's CFO for nearly a decade until May 2018.
Our sources had warned that there was a substantial risk for Nissan not to settle this case as documents might emerge showing that Ghosn and Kelly were set up.
Tokyo Kelly case
In another recent development, Japanese prosecutors on Wednesday had sought a two-year jail sentence for former Ghosn aide Kelly, who is on trial in Tokyo over financial misconduct allegations.
While Ghosn is at large in Lebanon after fleeing Japan in an audio equipment box, Kelly is the only person to stand trial over claims Nissan tried to hide planned payments to the auto tycoon.
In a Tokyo court, prosecutors also demanded that Nissan, standing trial as a firm alongside Kelly, be fined 200 million yen ($1.8 million).
The defense will deliver its final arguments on October 27 and the verdict could follow several months later.
Prosecutors alleged that Kelly, a 65-year-old lawyer, played a key role in what they described as a conspiracy to under-report Ghosn's compensation between 2010 and 2018.
“Kelly was behind the efforts to hide Ghosn's income,” they said in their statement.“It was a role only Kelly, who had deep trust from Ghosn, could fulfill.”
The prosecutors added:“It needed to be someone comfortable with pursuing … Ghosn's demands, and qualified to be the 'brains' with enough skills as a lawyer to deal with various risks including criminal sanctions.”
Falsifying annual securities reports can carry a sentence of up to 10 years under Japanese law.
Kelly has repeatedly denied any wrongdoing and is living in Tokyo, out on bail and forbidden from leaving Japan while fighting the case.
His lawyer Yoichi Kitamura told Agence France Presse on Wednesday that the prosecutors' request“means nothing for us, because we're confident Greg Kelly is not guilty.”
“Unless we get the not guilty verdict we'll automatically appeal,” he said, adding that Kelly had been“loyal to Nissan, but not to Ghosn as an individual.”
Former Nissan executive Greg Kelly, who is charged with financial misconduct, during an interview at his apartment in Tokyo. Photo: AFP / Behrouz Mehri
Vast fallout
The Nissan scandal erupted in 2018 when Ghosn and Kelly were arrested in the Japanese capital, grabbing headlines and sending shockwaves around the corporate world.
Ghosn was slapped with a series of financial misconduct charges, including allegations he was to receive payment after retirement that should have been declared but was not.
The charges against Kelly involve about 9.1 billion yen ($82 million at current rates) that prosecutors say had been promised to his former boss upon retirement.
Nissan has pleaded guilty to the charge against it over the alleged payments.
But both Kelly and Ghosn say no final agreement was made on any post-retirement pay, and therefore no disclosure was legally required.
Ghosn, a French, Lebanese and Brazilian national, jumped bail in December 2019 and fled to Lebanon, where he remains a fugitive.
He says he fled for fear he would not receive a fair trial and claims the charges against him were cooked up by Nissan executives opposed to his plans to more closely integrate the firm with French partner Renault.
The fallout from Ghosn's arrest has been vast, with Nissan's CEO forced out after his own financial irregularities were uncovered in a subsequent probe.
And Ghosn's audacious escape has also prompted legal repercussions around the globe.
The American father and son who helped Ghosn flee Tokyo were given prison sentences in July, having been extradited to Japan from the United States.
Two pilots and another employee of a private airline in Turkey, where Ghosn switched planes before heading to Lebanon, have also been sentenced to four years and two months for their role in the escape.
Ghosn was questioned by French investigators in Lebanon in May over a series of alleged financial improprieties. But he was only heard as a witness and would need to be in France to be formally indicted.
Roger Schreffler, a veteran correspondent for Wards Automotive and a former president of the Foreign Correspondents Club of Japan, is now based in Providence, Rhode Island, USA. Katie Forster and Natsuko Fukue of AFP contributed reporting from Tokyo.
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