Nissan chairman arrested on suspicion of 'financial misconduct'

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Japanese media said Mr Ghosn voluntarily submitted to questioning by Tokyo prosecutors on Monday. The firm said it has also uncovered evidence of other "significant acts of misconduct" by Ghosn. Ghosn became president of Nissan in June 2000 and chairman in April 2017. He identified three types of serious conduct: under-reporting income, using investment funds for personal gain and illicit use of company expenses.

"Beyond being sorry I feel great disappointment, frustration, despair, indignation and resentment", he said, according to The Associated Press.

A Japanese judicial source told AFP that Ghosn could legally be held for up to 23 days but would possibly be freed on bail before then.

Nissan said that the misconduct uncovered constituted clear violations of the duty of care as directors, adding that Nissan's Chief Executive Officer Hiroto Saikawa will now propose to the Nissan Board of Directors to promptly remove Ghosn from his positions. Kelly could also not be reached for comment.

Follow Renault's share price on Markets Insider. The value of Nissan securities listed in Germany fell by 12%.

"As a shareholder. however, the French government will remain extremely vigilant regarding the stability of the alliance, the (Renault) group and. its employees, who have the full support of the state".

Ghosn is widely credited with saving both Renault and Nissan from bankruptcy.

Nissan did not comment on the scope of the alleged misdealing, but other Japanese news agencies reported that Ghosn underreported his income by $44.3 million (5 billion yen) over five years. Now, though, Ghosn's actions have been called into question.

"It is hard not to conclude that there may be a gulf opening up between Renault and Nissan", said Bernstein analyst Max Warburton, raising the prospect of a potential "re-Japanization" of Nissan and the end of the alliance.

Brazillian-born Mr Ghosn, 64, saved Nissan from near-collapse nearly two decades ago, but now his firing from the company appears nearly certain. Renault owns 43 per cent of Nissan, which owns 15 per cent of Renault and 34 per cent of Mitsubishi. The French-Brazilian was responsible for the so-called Nissan Revival Plan back in 1999, at a time when the Japanese automaker was mired in more than $20bn in debt.

It said an investigation found that Ghosn and another board member had been under-reporting Ghosn's compensation.

Recent cases of corporate malfeasance have hit Japanese companies including accounting irregularities at Toshiba Corp. and data falsification and improper inspections by manufacturers including Nissan. A U.S. citizen who trained as a lawyer, Kelly joined Nissan's North American arm in 1988.

Ghosn was appointed CEO of Nissan in 2001 following his successful efforts to restructure the French auto giant Renault, and transitioned past year into a role as board chairman. Mr Ghosn remained in that post until past year.

Nissan's annual securities report shows Ghosn received annual remuneration exceeding 1 billion yen ($8.9 million) until fiscal 2016, when shareholders voted against his pay package. There he helped engineer a turnaround in the carmaker's fortunes that earned him the nickname "Le Cost Killer".

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