Nissan
Carlos Ghosn

Nissan chairman Carlos Ghosn has been arrested in Japan over allegations of financial misconduct, the Japanese car giant said on Monday.

Ghosn’s arrest and his likely dismissal from Nissan, as well as possibly from Mitsubishi and Renault, sent shockwaves through the auto industry, where he is a towering figure, credited with turning around several major manufacturers.

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Besides being chairman of Nissan, the 64-year-old is also CEO of Renault and leads the Nissan-Renault-Mitsubishi alliance.

Nissan’s board will meet on Thursday to decide his fate, and Mitsubishi said it would propose he be dismissed as chairman “promptly.” Renault said its board would meet “shortly”, after Ghosn was detained over allegations including underreporting his income.

At a hastily organised press conference, Nissan CEO Hiroto Saikawa expressed “despair,” but also suggested that Ghosn had accrued too much power and eluded proper oversight.

“Too much authority was given to one person in terms of governance,” he told reporters at Nissan’s headquarters in Yokohama.

“I have to say that this is a dark side of the Ghosn era which lasted for a long time.”

The news of Ghosn’s downfall emerged unexpectedly on Monday evening, with local media first reporting he was being questioned by prosecutors and that Nissan’s headquarters was being raided.

Shortly afterward, Nissan said in a statement that it had been investigating Ghosn and Representative Director Greg Kelly for months after a whistleblower report.

The statement said the company had uncovered years of financial misconduct including under-reporting of income and inappropriate personal use of company assets.

Saikawa gave few details about the nature of the improprieties, including refusing to confirm reports that Ghosn under-reported his income by 5 billion yen, or around $44 million, over five years from 2011.