Japanese prosecutors today arrested Nissan Motor Co chairman Carlos Ghosn over suspected under-reporting of his corporate salary by several hundreds of millions of yen, reports quoting sources said.
Ghosn has been arrested on charge of not reporting full salary, reports said, adding that investigators at the Tokyo District Public Prosecutors Office were looking at possible violations of the Financial Instruments and Exchange Law that relate to false entries on corporate financial statements.
Ghosn, 64, will be further questioned, the reports said.
Nissan Motor, meanwhile, said it would take immediate action to remove Ghosn as company chairman and board member.
The Japanese automaker said 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.
Ghosn was sent from France’s Renault SA to take over as chief operating officer of Nissan in 1999. He became Nissan president the following year, and was involved in rebuilding the automaker as both president and CEO from June 2001.
He concurrently became president of Renault in 2005 and led the move to partner with Mitsubishi Motors Corp in 2016 after that automaker was found to have falsified fuel-efficiency data.
Ghosn became chairman of Mitsubishi Motors in December 2016.
The news of Ghosn who is highly held in Japan as the man who turned Nissan around from near bankruptcy, comes as a shock.
Nissan Motor Co said it has been investigating possible improper practices of Ghosn and representative director Greg Kelly for several months, following a whistleblower report, and that it was fully cooperating with investigators.
It said was moving to terminate Carlos Ghosn from his chairman’s post after finding that he had used company money for personal use and committed several other serious acts of misconduct.
“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 Ghosn’s compensation,” Nissan said in a statement.
Nissan further said that CEO Hiroto Saikawa would propose to the Nissan board to remove Ghosn and Kelly.
The Asahi newspaper reported on its website that prosecutors had begun searching the offices of Nissan’s headquarters and other locations on Monday evening.
The ouster of Ghosn is likely to raise questions about the future of the Nissan-Renault alliance.