March 18, 2019

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American Held in Nissan Investigation Nears Release in Japan

American Held in Nissan Investigation Nears Release in Japan
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Greg Kelly, a United States citizen and member of the board of Nissan Motor of Japan, neared release from a Tokyo jail on Tuesday

A Japanese judge, reviewing requests from Mr. Kelly’s family and the United States government, ruled that Mr. Kelly could be freed on bail of 70 million yen, or about $640,000. Prosecutors immediately appealed the decision but the court denied the appeal Tuesday night.

Lawyers for Mr. Kelly, who has been having health problems, paid the cash bail on Tuesday, the court said in a statement.

The court decision came more than a month after Mr. Kelly and the carmaker’s chairman, Carlos Ghosn, were arrested on allegations that they had underreported Mr. Ghosn’s compensation to regulators for years.

An end to Mr. Kelly’s detention would undoubtedly be a major relief to members of his family, who had asked that he be freed so that he could have surgery for an acute spinal condition.

But his release would not resolve the crisis at the top of the alliance between Nissan, Renault of France and Mitsubishi Motors of Japan, an arrangement that has been without a clear leader or succession plan since Mr. Kelly, 62, and Mr. Ghosn, 64, were arrested on Nov. 19.

Mr. Ghosn was still in custody on Tuesday after being rearrested last week on suspicion that he had shifted personal investment losses to Nissan’s books amid the financial crisis in 2008. A Japanese court ruling on Sunday will keep him in a Tokyo jail until at least Jan. 1.

Mr. Kelly, who led Nissan’s human resources operations before joining the board, could still face criminal charges. Japanese prosecutors had accused him of being the mastermind behind a scheme that let Mr. Ghosn illegally omit $44 million in compensation, about half of his total pay, from securities filings over five years.

Lawyers in Japan for Mr. Kelly and Mr. Ghosn have denied the charges.

Mr. Kelly, far less well known than Mr. Ghosn outside Nissan, was a powerful figure within the company. He worked his way up from associate counsel in 1988 to become the carmaker’s first American board member in 2012.

He was considered a consigliere to Mr. Ghosn, who oversaw an auto empire that included Nissan, Renault and, since 2016, Mitsubishi. Mr. Kelly often operated in the background, offering legal advice, according to current and former executives who spoke on condition of anonymity because of the continuing legal case in Japan.

Mr. Kelly returned to the United States two years ago, settling in a Nashville suburb while remaining on the Nissan board. His family has portrayed him as the victim of a corporate power play who was lured to Tokyo last month on false pretenses so he could be arrested.

A senior Nissan executive urged Mr. Kelly to attend a November board meeting in person rather than by video conference, and sent a corporate jet to pick him up, Mr. Kelly’s wife, Donna Kelly, said. Instead, he was taken into custody minutes after he arrived in Tokyo.

Like Mr. Ghosn, Mr. Kelly was not allowed to communicate with his family or an American lawyer while he was in jail, and he was questioned at length by prosecutors without a lawyer present, as is standard in Japan. Japanese doctors also petitioned the court on Mr. Kelly’s behalf after viewing his medical records.

In a video meant to call attention to her husband’s condition, Ms. Kelly said he had spinal stenosis that caused “numbness, tingling and shooting pains in his extremities.”

“His symptoms are exacerbated by sleeping on a futon on the floor of his detention cell,” Ms. Kelly said, adding that the symptoms could become permanent if Mr. Kelly were not treated soon.

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