Shares in Nissan have tumbled following the arrest of chairman Carlos Ghosn.
Ghosn has been arrested after he was accused of under-reporting his salary. He has been fired by Nissan and Mitsibushi whilst the Renault board are still to decide on his fate.
In financial statements that were exposed by a whistleblower, Ghosn has been accused of under-reporting his salary by 5 billion yen ($44.4 million; £34.5 million) over the past five years.
Shares in Nissan fell 5.5%, its lowest level since July 2016, whilst Mitsubishi Motors plunged 6.9%. Renault’s share price fell 3.3% this morning in Paris, adding to yesterday’s 8% fall.
Nissan said in a statement that Ghosn 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.”
Anna Nicholls, who is an analyst at the Economist Intelligence Unit, said: “The ousting of Carlos Ghosn is not only shocking in itself, but it also brings to a head a question that has long hung over the alliance – how it will survive his departure.”
“The strong bond between the French and Japanese carmakers depends partly on cross-shareholdings but even more on Ghosn’s huge personal influence,” she added.
Shares in Nissan (TYO: 7201) are trading -5.45%, Renault (EPA: RNO) shares are currently -1.73% and shares in Mitsibushi (TYO: 8058) are trading +1.49%.