Nissan chairman Carlos Ghosn, one of the world's best-known businessmen, was reportedly under arrest in Japan on Monday in a shocking fall from grace linked to allegations of financial misconduct.
Nissan said it had been investigating its chairman for months and would now move to fire him.
The news sent shockwaves through the auto industry, where Ghosn is a towering figure who is credited with turning around several major manufacturers and leads an alliance of Nissan, Renault and Mitsubishi.
"The Tokyo District Public Prosecutor's Office arrested Nissan chairman Ghosn on suspicion of violation of the Financial Instruments and Exchange Act," NHK said.
In a statement, Nissan said it had been conducting a probe into Ghosn for several months after receiving a whistleblower report and had uncovered misconduct going back several years.
The Tokyo prosecutor's office had no comment on the reports about Ghosn. Mitsubishi also declined comment.
Nissan said it had launched an investigation into both Ghosn and Representative Director Greg Kelly several months ago.
"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," the statement said.
"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 propose to the board of directors that it "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 USD 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. The firm has not commented.
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.
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 USD 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.
Earlier this year he told AFP there were "no taboos" in the relationship between the auto firms, and said they were looking to increase convergence, while remaining independent.
The group's Alliance 2022 plan, unveiled last year, targets making more than 10 billion euros in cost savings over the five years and raising sales to 14 million vehicles.
Ghosn has not yet commented on the allegations. Nissan is expected to hold a press conference later today.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)