TOKYO —

Nissan chairman Carlos Ghosn is facing dismissal after his reported arrest in Japan over allegations of financial misconduct, the firm’s CEO said Monday, in a shocking fall from grace for one of the world’s best-known businessmen.

The Japanese automaker’s CEO Hiroto Saikawa told journalists the Nissan board would meet on Thursday to discuss firing Ghosn, who was reportedly questioned by Japanese prosecutors for various improprieties including underreporting his income.

“I will call a board meeting to make a proposal to remove him from the position of chairmanship and approve it,” Saikawa told a news conference.

Saikawa said he believed that Ghosn and Nissan’s Representative Director Greg Kelly were both under arrest, as local media earlier reported.

“These two gentleman are arrested this evening, that’s what I understand,” said Saikawa.

Ghosn’s detention sent shockwaves through the auto industry, where he is a towering figure who is credited with turning around several major manufacturers and leads an alliance of Nissan, Renault and Mitsubishi.

Nissan’s CEO insisted the arrest would not affect the alliance, as French President Emmanuel Macron warned Paris would be “extremely vigilant” about the stability of Renault and the three-firm alliance after Ghosn’s arrest. France owns a 15 percent stake in Renault.

“The partnership among the three entities will not be affected by this event, rather we will closely work together with all the partners to contain any possible confusion,” said Saikawa. Saikawa said that too much power had been concentrated in one executive.

In an earlier statement, Nissan said it had begun investigating Ghosn and Kelly after receiving a whistleblower report and had uncovered misconduct going back several years.

Saikawa added the internal investigation was ongoing and that he hoped the issue would not have an impact on Nissan’s brand.

The Tokyo prosecutor’s office had no comment on the reports about Ghosn. Mitsubishi and Renault also declined comment.

“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.

— AFP

“Also, in regards to Ghosn, numerous other significant acts of misconduct have been uncovered, such as personal use of company assets, and Kelly’s deep involvement has also been confirmed.”

The company said it had provided information to Japanese prosecutors and would recommend that the board of directors “promptly remove Ghosn from his positions” along with Kelly.

The astonishing news first emerged Monday evening, when the Asahi Shimbun newspaper reported Ghosn was being questioned by prosecutors and was likely to face arrest.

Japanese media later said Tokyo prosecutors were raiding Nissan’s headquarters in the city of Yokohama.

The Kyodo news agency said Ghosn was suspected of understating his income by 5 billion yen, or around $44 million, over five years from 2011. It also reported that Kelly had been arrested.

Renault shares plunged more than 12 percent in late morning trading in Paris on the news, which emerged after the end of the Tokyo session.

Ghosn’s arrest would “rock the Renault-Nissan-Mitsubishi alliance as he is the keystone of the alliance,” said Satoru Takada, an analyst at TIW, a Tokyo-based research and consulting firm.

“He is the man of charisma for the alliance. It is likely to have a negative impact on its brand image,” he told AFP.

“It’s the future of the alliance that seems in play, because the thing holding it together seemed to be Ghosn himself,” said Daniel Larrouturou, a senior executive at investment firm Diamant Bleu Gestion.

Nicknamed Le Cost Killer, Brazil-born Ghosn, 64, is known for overhauling Renault and Nissan starting in the nineties.

Renault came to the rescue of the then-ailing Japanese automaker in 1999 and parachuted in Ghosn, who set about slashing costs and jobs in a huge corporate overhaul.

In 2016, Ghosn also took charge at troubled Mitsubishi after Nissan threw it a lifeline, buying a one-third stake for about $2.2 billion as it wrestled with a mileage-cheating scandal that hammered sales.

He is credited with saving Nissan from bankruptcy through a series of hardnosed measures including closing plants and restructuring, and he has instant name recognition in Japan, where he is a rare high-profile foreign executive.

Ghosn has been regarded as the glue holding together the sprawling alliance of Nissan, Renault and Mitsubishi, and questions have been raised in the past about how his eventual departure might affect the coalition.

But he has also faced opposition, including over his pay, with his compensation package Renault prompting a spat with shareholders and criticism from France’s then-economy minister Emmanuel Macron.

Bloomberg reported Ghosn took home $6.5 million in the most recent fiscal year from Nissan, in addition to $8.5 million from Renault and about $2 million from Mitsubishi in the latest period. Ghosn has not yet commented on the allegations. — AFP