Tokyo: Nissan Motor Co Ltd's chairman, Carlos Ghosn, has been arrested over alleged financial irregularities.
The Japanese automaker said earlier on Monday that based on a whistleblower report, Ghosn had used company money for personal use and that it had been investigating possible improper practices of Ghosn and Representative Director Greg Kelly for several months.
“The investigation showed that over many years both Ghosn and Kelly have been reporting compensation amounts in the Tokyo Stock Exchange securities report that were less than the actual amount, in order to reduce the disclosed amount of Carlos Ghosns compensation,” Nissan said in a statement.
Ghosn had under-reported nearly 10 billion yen ($88.70 million) in compensation as nearly 5 billion yen. Kyodo news agency said the under-reporting took place over five years, from 2011.
Nissan Motor Co Ltd said it was moving to terminate Carlos Ghosn from his chairman's post after he committed several serious acts of financial misconduct.
The news comes as a shock in Japan where Ghosn, a rare foreign top executive, is well regarded for having turned Nissan around from near bankruptcy. Ghosn is also chairman and chief executive of France's Renault.
The prosecutors reportedly had begun searching the offices of Nissan's headquarters and other locations on Monday evening. The Tokyo District Public Prosecutors Office declined to comment.
Nissan said it would brief reporters on Monday evening. Spokesmen for Renault and the Renault-Nissan-Mitsubishi Motors alliance did not immediately return calls and messages seeking comment on the arrest reports.
An ouster of Ghosn, 64, is bound to raise questions about the future of the alliance that he personally shaped and had pledged to consolidate with a deeper tie-up, before eventually stepping back from its operational leadership.
After the arrest, Nissan's shares on Tuesday fell by 5.45 per cent on the Tokyo Stock.
The price of Nissan shares fell to 950.7 yen ($8.45), after having earlier slumped to a low of 940 yen.
Japanese carmaker Mitsubishi Motors, where Ghosn served as chairman of the board, said in a statement that it would launch an internal investigation to find out if he was involved in any irregularities within the company.
Mitsubishi's shares fell 6.85 per cent on the stock market.