(Bloomberg) -- Nissan Motor Co. won't appeal a ruling by a court in Japan that found the automaker guilty for its role in underreporting former Chairman Carlos Ghosn's compensation, calling it a “fair judgment.”
On Thursday, Chief Judge Kenji Shimotsu ordered Nissan, which didn't dispute the charges, to pay a 200 million yen ($1.7 million) fine, saying the company bears responsibility and the case revealed its “dysfunctional governance.” Greg Kelly, Nissan's former director, was found partially guilty and given a suspended sentence.
Ghosn and Kelly were arrested in Tokyo on the same day in November 2018 and charged with various financial misconduct offenses, triggering shock waves that reverberated through Nissan and its global carmaking alliance with Renault SA and Mitsubishi Motors Corp. Nissan's profits slumped to a decade low, and score-settling fueled an exodus of other top executives.
“Nissan treats the judgment with utmost seriousness, and after careful consideration of the principal penalty and the findings in the judgment, the company has decided it will not appeal,” the Yokohama-based company said in a statement Friday.
Read more: U.S. Executive Given Suspended Sentence for Hiding Ghosn Pay
Lawyers for Kelly said they will appeal the ruling. Kelly, 65, was left alone to defend himself after Ghosn staged a spectacular escape from Japan at the end of 2019, making his way by private jet to Lebanon, where he now resides.
Kelly, who formerly oversaw human resources and legal affairs at Nissan, argued that there wasn't an agreement to pay Ghosn, as well as no requirement to disclose any such compensation and that his former boss was never paid.
In a statement, Kelly said he was “shocked” by the ruling. “I acted in Nissan's best interests and didn't participate in any illegal activities,” he said. “I am innocent on all counts.”
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