Former Nissan Motor director Greg Kelly testified in court in Tokyo for the first time, saying he considered Carlos Ghosn a flight risk after the ex-chairman voluntarily reduced his own pay, and that he looked for legal ways to keep him at the car maker.
“I and other executives believed that after Mr Ghosn reduced his salary, well below that of other global executives, that Mr Ghosn was a retention risk,” Mr Kelly said in response to questions by his defence counsel. He denied that there was a conspiracy to inflate the executive’s pay.
Mr Kelly, 64, was arrested on the same day as Mr Ghosn in November 2018 and has been in Japan ever since, seeking to prove his innocence against charges of helping Mr Ghosn underreport his remuneration by more than 9 billion yen ($83 million).
I and other executives believed that after Mr Ghosn reduced his salary, well below that of other global executives, that Mr Ghosn was a retention risk
Much has happened in the 900-plus days since the two were detained. Mr Ghosn made a spectacular escape from Japan at the end of 2019, making his way by private jet to Lebanon.
Nissan’s profits tumbled and its alliance with Renault and Mitsubishi Motors has frayed. Details emerged showing that a small group of insiders worked for months before Mr Ghosn’s arrest to bring a criminal case against him.
Mr Kelly’s testimony at the Tokyo District Court on Wednesday started the final phase of proceedings in a trial that began eight months ago. During that time, Mr Kelly sat quietly as current and former Nissan executives, experts and other witnesses took the stand. Flanked by his lawyers and taking notes, he occasionally leaned to one of them to ask questions.
His wife Dee attends most days, unless she needs to be at the Japanese school where she enrolled to obtain a student visa to be with her husband. Proceedings are slow, because every question and answer is translated into English or Japanese.
On Wednesday, Mr Kelly was on the witness stand, going over his background and responsibilities at Nissan in a courtroom filled with more than the usual number of people, including 17 journalists and more than two dozen in the gallery.
“We have to operate within the laws of the companies where you do business,” Mr Kelly said of the nature of his work. “We sought to achieve growth and profitability within the countries where we do business.”
Mr Kelly explained that he knew Mr Ghosn had reduced his pay and sought ways to keep him at Nissan. “We wanted to find ways to retain Mr Ghosn at Nissan because that would have been valuable for Nissan,” Mr Kelly said.
On Tuesday, Mr Kelly’s defence attorney read aloud in court Mr Ghosn’s statements to prosecutors while he was detained in late 2018. The former Nissan chairman said he deferred his compensation voluntarily and understood that there was no legal obligation for the car maker to pay him if it chose not to.
“The reason why I reduced my compensation was due to public opinion and to keep up the motivation of Nissan employees,” Mr Ghosn told prosecutors at the time, according to the testimony read by Mr Kelly’s lawyer.
Mr Kelly was one of Nissan’s most powerful executives, overseeing human resources, legal affairs and other matters before giving up some of his duties in 2015 while remaining on the board. Hari Nada, who was promoted by Mr Kelly and eventually took on parts of his job, was one of the key insiders who orchestrated Mr Ghosn and Mr Kelly’s downfall, reporting by Bloomberg has shown. It was Mr Nada who sent a private jet to bring Mr Kelly to Japan on the same day as Mr Ghosn, to be detained.
The arrests triggered shock waves that still reverberate today. Nissan’s profits slumped to a decade-long low, and score-settling fuelled an exodus of other top executives. The turmoil left the company in a weaker position as it seeks to navigate an industry that’s being disrupted by a shift to electric vehicles and self-driving cars.
Although Nissan was also charged with misstating Mr Ghosn’s compensation, the company has effectively pleaded no contest, saying that Mr Ghosn and Mr Kelly “intentionally committed serious misconduct and significant violations of corporate ethics”.
“Nissan had carried out a robust and thorough internal investigation that included external lawyers,” spokeswoman Azusa Momose said in an emailed statement. “The facts surrounding the misconduct will be shown during the court proceedings and the law will take its course.”
The facts surrounding the misconduct will be shown during the court proceedings and the law will take its course
Mr Ghosn, who looms large over court proceedings, is in Beirut and seeking to restore his reputation. Apart from taking interviews, he has started a website, published a book and is working on a documentary.
Michael and Peter Taylor, two Americans who were extradited to Japan to face charges of helping Mr Ghosn flee the country, will have their first hearing in Tokyo next month.
Mr Kelly’s testimony is scheduled to last through early July, followed by closing arguments a few months later. A verdict could come late this year or early in 2022. By then, three years would have elapsed since Mr Ghosn and Mr Kelly’s arrests.
“This entire case was fabricated by rogue Nissan employees, with significant assistance from Japanese government officials and before an ‘investigation’ even began,” James Wareham, Mr Kelly’s US-based lawyer, wrote in an email.
“Why? For the sole purpose of preventing Carlos Ghosn from merging Renault and Nissan. The fact that Greg Kelly is in Tokyo today is deplorable and an embarrassment to Japan and its broken criminal ‘justice’ system.”
Sri Lanka-India Test series schedule
- 1st Test India won by 304 runs at Galle
- 2nd Test Thursday-Monday at Colombo
- 3rd Test August 12-16 at Pallekele
RACE CARD
5pm: Maiden (PA) Dh80,000 1,400m
5.30pm: Maiden (PA) Dh80,000 1,200m
6pm: Arabian Triple Crown Round-1 (PA) Listed Dh230,000 1,600m
6.30pm: HH The President’s Cup (PA) Group 1 Dh2.5million 2,200m
7pm: HH The President’s Cup (TB) Listed Dh380,000 1,400m
7.30pm: Wathba Stallions Cup (PA) Handicap Dh70,000 1,200m.
INFO
What: DP World Tour Championship
When: November 21-24
Where: Jumeirah Golf Estates, Dubai
Tickets: www.ticketmaster.ae.
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Family reunited
Nazanin Zaghari-Ratcliffe was born and raised in Tehran and studied English literature before working as a translator in the relief effort for the Japanese International Co-operation Agency in 2003.
She moved to the International Federation of Red Cross and Red Crescent Societies before moving to the World Health Organisation as a communications officer.
She came to the UK in 2007 after securing a scholarship at London Metropolitan University to study a master's in communication management and met her future husband through mutual friends a month later.
The couple were married in August 2009 in Winchester and their daughter was born in June 2014.
She was held in her native country a year later.
The President's Cake
Director: Hasan Hadi
Starring: Baneen Ahmad Nayyef, Waheed Thabet Khreibat, Sajad Mohamad Qasem
Rating: 4/5
'Saand Ki Aankh'
Produced by: Reliance Entertainment with Chalk and Cheese Films
Director: Tushar Hiranandani
Cast: Taapsee Pannu, Bhumi Pednekar, Prakash Jha, Vineet Singh
Rating: 3.5/5 stars
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
The specs
Engine: 3.8-litre twin-turbo flat-six
Power: 650hp at 6,750rpm
Torque: 800Nm from 2,500-4,000rpm
Transmission: 8-speed dual-clutch auto
Fuel consumption: 11.12L/100km
Price: From Dh796,600
On sale: now
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
