Nissan Motor Co has agreed to settle a class action by investors who said they had been misled about a compensation plan that allegedly saw former chairman Carlos Ghosn overpaid, according to a court filing.
Ghosn and Greg Kelly, who was a director at the Japanese automaker, were arrested in Japan in November 2018 on accusations they understated Ghosn's income by more than $80 million.
Ghosn, who also faced other charges he misdirected Nissan funds for his own gain, escaped trial in Japan in late 2019 and is now in Beirut, while Kelly is in Tokyo facing trial.
Nissan is settling the civil lawsuit in Tennessee on behalf of itself, Ghosn and Kelly, people with knowledge of the matter said. Lawyers for Kelly had been seeking to compel Nissan and its law firm, Latham and Watkins LLP, to hand over evidence in the proceedings, according to filings.
The Jackson County Employee Retirement System and other investors sued Nissan and its executives in US District Court, Middle District of Tennessee, after the arrests.
The plaintiffs accused the company and executives of making misleading statements about Ghosn’s alleged plans to increase his pay through deferred compensation. Nissan, Ghosn and Kelly have denied the charges.
“I have zero doubt that the Nissan settlement was to prevent Greg Kelly from getting access to documents that prove the case was a sham from the start,” said James Wareham, Kelly’s lawyer at Fried, Frank, Harris, Shriver and Jacobson LLP.
Azusa Momose, a spokeswoman for Nissan, declined to comment on ongoing litigation. Attorneys for Ghosn didn’t respond to request for comment. A lawyer representing the Jackson County Employee Retirement System declined to comment.
Ghosn and Kelly were dismissed by Nissan following their arrests. Nissan and Ghosn have lodged lawsuits against each other in Japan and the Netherlands.
While Nissan and Kelly are co-defendants in the criminal trial in Tokyo, Nissan isn’t disputing the charges brought by prosecutors. Kelly has denied the charges and is fighting them in a trial that’s due to end next month. – Bloomberg