Update - 2.48pm: Nissan Motor fired Carlos Ghosn as chairman in a dramatic end to the powerful executive’s nearly two decade long reign at the Japanese carmaker after his arrest for alleged financial improprieties.
In an hours-long meeting, the company’s board of directors voted unanimously to dismiss Mr Ghosn as chairman and as a representative director, Nissan said in a statement.
It said its own internal investigation, prompted by a whistleblower, found serious misconduct including under-reporting of his income and misuse of company assets.
It was a stunning downfall for one of the biggest figures in the car industry, a man who helped drive turnarounds at both France’s Renault SA and at Nissan and then managed an alliance between them that sold 10.6 million cars last year, besting its rivals.
Nissan said in a statement filed to the Tokyo Stock Exchange that its investigation uncovered misuse of company investment funds and expense money for personal gain.
Earlier this week, Renault voted to keep Mr Ghosn as its chief executive but appointed Thierry Bollore, its chief operating officer, as its interim chief.
Another Nissan executive, Greg Kelly, was arrested on suspicion of collaborating in the wrongdoing and also will be dismissed as a representative director, Nissan said.
Their replacements will be decided later, it said.
Mr Ghosn, 64, is suspected of under-reporting 44.6 million US dollars in income from 2011 to 2015, according to Tokyo prosecutors.
Nissan’s board consists of nine members, including Mr Ghosn and Greg Kelly.
The seven other board members voted at the meeting, including two members from Nissan and two from Renault.
Mr Ghosn and Mr Kelly will remain on Nissan’s board for now as that decision will be up to shareholders.
No date has been set yet for a shareholders meeting.
Mr Ghosn is also chairman at Mitsubishi Motors Corp, a smaller Japanese carmaker that is partnering with the Renault-Nissan alliance and plans to hold a board meeting next week.
Mr Ghosn has been held since his arrest on Monday at a Tokyo detention centre, under the same Spartan conditions as other detainees, Tokyo deputy prosecutor Shin Kukimoto told reporters.
He gave few details about the case.
Under Japanese law, suspects can be held for 20 days per possible charge without an official indictment.
Additional charges can be tagged on, resulting in longer detentions. Neither has been charged so far.
The maximum penalty upon conviction for violating finance and exchange laws is 10 years in prison, a 10 million yen fine (£69,000), or both.
A French citizen born in Brazil, Mr Ghosn became something of a corporate superstar in Japan as he led Nissan’s revival from near bankruptcy after Renault sent him to help in 1999.
Mr Ghosn served as Nissan’s chief executive from 2001 until last year.
He became chief executive of Renault in 2005, leading the two carmakers simultaneously.
In 2016, he also became chairman of Mitsubishi Motors after Nissan took it into the alliance.
Mr Kelly, 62, joined Nissan, maker of the Leaf electric car and Infiniti luxury models, in the US in 1988.
He became a board member in 2012.
His background is in human resources and alliance management.
Analysts say the future of Nissan’s alliance with Renault may be at stake, though Nissan’s statement Thursday said the company’s leadership was determined to minimise the impact from Mr Ghosn’s case on the partnership.
Renault owns 43% of Nissan, and Nissan owns 15% of Renault.
“The longstanding alliance partnership with Renault remains unchanged,” the Nissan statement in English said, stressing the alliance rather than the misdeeds.
It also said the board will study setting up a third-party committee to beef up governance in management and compensation at Nissan.
Chief executive Hiroto Saikawa, in a lengthy news conference on Monday, said too much power had been concentrated in Mr Ghosn, with too little credit given to the many others working for the company’s success.
Janet Lewis, managing director and head of industrial research, Asia, at Macquarie Capital Securities in Tokyo, said in an interview that an adjustment was needed to give Nissan more say in the alliance with Renault.
The partnership remains crucial for both companies, she said, since apart from financial ties the companies share technology and parts.
The carmakers need to be more like roommates than a married couple, “so they have to find a way to share their house and share all of their expertise because it’s very necessary in terms of new automotive technology, new platform development”, Ms Lewis said.
“They need to figure out how they can continue this and still live happily together in the same house.”
Nissan Motor's board of directors has voted to dismiss Carlos Ghosn as its chairman after he was arrested on suspicion of falsifying financial reports and other misconduct, according to Japanese media reports.
Nissan's board held an emergency meeting at the company headquarters in Yokohama on Thursday.
The national broadcaster NHK and other Japanese media reported the decision, which emerged after hours of discussions.
However, Nissan refused to comment, saying it has to first inform the Tokyo Stock Exchange of its decision.
Earlier this week, alliance partner Renault voted to keep Mr Ghosn as its chief executive but appointed Thierry Bollore, the chief operating officer, as interim chief.
Tokyo prosecutors say Mr Ghosn is suspected of under-reporting 44.6 million US dollars in income from 2011 to 2015.