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Prosecutors: Nissan's Ghosn understated pay by ¥5 bil

Prosecutors: Nissan's Ghosn understated pay by ¥5 bil

Renault and Nissan chairman Carlos Ghosn, who helped engineer Renault's return to Formula 1 as a full constructor in 2016, has been arrested for alleged violations of Japanese financial laws.

Ghosn, one of the vehicle industry's best known leaders, was arrested on Monday after Nissan Motor Co said he had engaged in wrongdoing at the Japanese firm, including personal use of company money and under-reporting his earnings, for years.

The private communication came from Nissan Chief Executive Hiroto Saikawa, whose company is 43.4 percent-owned by Renault in a complex alliance forged by Ghosn over nearly two decades.

It is unclear how long Ghosn could be held in prison, or even when prosecutors could officially announce the charges against him.

Another board member, Greg Kelly, was also deeply involved in the misconduct, Nissan said.

A day after the dramatic fall from grace of the 64-year-old, a towering figure in the automotive industry, the sources said Tokyo prosecutors believe these costs shouldered by the Japanese company should have been reported as part of the remuneration he received from the company in securities reports.

Nissan's board was due to meet Thursday to consider dismissing Ghosn and Kelly.

So with Ghosn out at Nissan and probably Renault as well, the companies are unlikely to get any closer.

Economy Minister Bruno Le Maire told France Info radio that he had ordered an inquiry into Ghosn's tax affairs immediately after learning of his arrest in Japan but that it showed up "nothing in particular" about his tax situation in France.

Together with Japan's Mitsubishi Motors (MMTOF), Nissan and Renault make up the biggest global carmaking alliance, which makes one of every nine cars sold around the world.

Renault which is aligned with Nissan is a large employer in France
Renault which is aligned with Nissan is a large employer in France

Ghosn added Mitsubishi to the alliance two years ago after the tiny automaker was caught in a gas-mileage cheating scandal.

In a sign Nissan may be seeking to loosen its French parent's hold on their alliance, the Japanese company told Renault's board on Monday it also had evidence of potential wrongdoing at Renault-Nissan BV, the Dutch venture overseeing alliance operations under Renault's ultimate control, three people with knowledge of the matter said.

Bassil directed Lebanese ambassador to Tokyo Nidal Yehya to "closely monitor Ghosn's case and ensure his ability to fairly defend himself".

He is admired for driving a turnaround at Nissan when it was near bankruptcy and for his foresight in pushing to bring electric and autonomous cars to the masses.

"I don't think there is anyone else on Earth like Ghosn who could run Renault, Nissan and Mitsubishi", he told reporters in Tokyo. He also promised support for the company's employees.

In its first public comment since the arrest, Renault said it remained focused on its partnership with Nissan and Mitsubishi.

Although precise details and the scale of the transgressions are yet to be revealed, some overseas reports indicate Mr Ghosn under-reported his income in Japan by ¥5 billion ($A61 million).

If the misconduct continued for years, as Saikawa said, analysts question how this could have passed undetected for so long, unless internal auditors and senior management turned a blind eye.

This story corrects the name of the Brazilian beach to Copacabana, not Copa Cabana.

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