The chairman of Nissan and chief executive of Renault will be fired by both car manufacturers over financial misconduct claims.
Carlos Ghosn has reportedly been under-reporting his pay package and was suspected following an internal investigation that has taken place over several months.
According to reports, Ghosn has been arrested in Tokyo.
Nissan revealed that the group’s chairman was exposed by a whistleblower.
In a statement, Nissan said that Ghosn and another senior executive, Greg Kelly, had been “reporting compensation amounts in the Tokyo Stock Exchange securities report that was less than the actual amount, in order to reduce the disclosed amount of Carlos Ghosn’s compensation”.
“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.”
“Nissan deeply apologises for causing great concern to our shareholders and stakeholders. We will continue our work to identify our governance and compliance issues, and to take appropriate measures.”
Ghosn is the chairman and chief executive of the Renault-Nissan-Mitsubishi Motors strategic alliance and is also considered a leading executive in the car industry.
He has commented on the effects of a hard Brexit on the group’s Sunderland factory. Ghosn has also acquired assurances from Theresa May that the car manufacturing sector would not be harmed after the Brexit referendum.
News of his arrest led to shares in Renault (EPA: RNO) plummeting by 11% and the market value falling from €2 billion (£1.78 billion) to €17 billion.
Renault has not commented.
Shares in Nissan (TYO: 7201) are currently trading -0.45% at 1,006 (1152GMT).