UPDATE, 3am Tuesday November 20, 2018: Hiroto Saikawa, CEO of Nissan, has held a press conference in Tokyo giving out some details about arrest of and the allegations of wrongdoing against Carlos Ghosn.
According to Automotive News, Saikawa confirmed Carlos Ghosn, chairman of Nissan and CEO of Renault, as well as Greg Kelly, a Nissan board member, have been taken into custody by Japanese authorities.
Saikawa said Ghosn was accused of under-reporting his income on stock market filings, diverting corporate investment funds for private use, and misusing company expenses.
“We have confirmed these two are the masterminds,” Saikawa said. He said the alleged misdeeds were a "negative impact of the long regime of Mr Ghosn", with the company keen on avoiding the concentration of power in a single individual from now on.
Nissan will hold a board meeting on Thursday to discuss Ghosn's removal. Via a series of cross-shareholdings Nissan is a core component of the Renault Nissan Mitsubishi Alliance, of which Ghosn was its CEO and its driving force.
Renault has confirmed it is in communication with Nissan, its alliance partner, and will convene a board meeting "very shortly". The French automaker says its directors want to restate their "dedication to the defence of Renault’s interest in the Alliance".
The Nissan CEO says "the alliance partnership itself will not be affected by this event", but wants the Alliance to reform its management structure.
11:58pm: An extraordinary press release issued late tonight by Nissan's global headquarters in Japan has accused its own chairman, Carlos Ghosn, of violating Japanese financial law.
Japanese news outlet Yomiuri has reported that Ghosn has been arrested in Japan, although this is still to be verified. Nissan itself has not spoken of an arrest.
The company's announcement states that a lengthy internal investigation has provided clear evidence that Ghosn, along with representative director Greg Kelly, had 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".
News agency Kyodo reports that Ghosn is suspected of understating income by 5 billion yen over five years, or about AU$62 million.
The infractions are said to have occurred "over many years".
Nissan claims its investigation has uncovered "other significant acts of misconduct", including personal use of company assets. No other details on these offences have been offered at this stage.
The company is expected to oust Ghosn.
Through his leadership of the Renault Nissan Mitsubishi Alliance, Ghosn led Nissan as CEO from 2009 to 2017, but stayed on as chairman after Hiroto Saikawa was tapped to succeed him as CEO.
It is Saikawa who will propose to the Nissan Board of Directors that Ghosn and Kelly be removed from their positions, with the investigation revealing "clear violations of the duty of care as directors".
Nissan says it has been providing information to the Japanese Public Prosecutors Office and has been "fully cooperating" with its investigation.
At the time of publishing, Renault – which holds a 43.4 per cent voting stake in Nissan – has yet to announce if it will take action, although the French manufacturer's Paris-listed shares have fallen 14 per cent since the news broke.
We will update this story as it develops.
FT reporter Peter Campbell was present for Saikawa's press briefing and posted the following to his Twitter profile:
Saikawa: "This is the negative aspect of the long regime of Mr Ghosn. This is a fact that we need to admit."— Peter Campbell (@Petercampbell1) November 19, 2018
Saikawa says current Alliance structure "concentrates power on one individual, this is not the only cause but it is one of the factors or drivers"."Because one individual was powerful for years, this has a big significant impact."— Peter Campbell (@Petercampbell1) November 19, 2018
Saikawa has moved on from governance to trash Ghosn's running of the company.Says in "day to day operation, there seemed to be negative impact" of his direct involvement."It could be said that he made decisions based on limited input."This is absolutely extraordinary.— Peter Campbell (@Petercampbell1) November 19, 2018
Conference ended.In total, an extraordinary, extraordinary, performance by Saikawa with the seeming intention of putting clear water between Nissan and Ghosn.— Peter Campbell (@Petercampbell1) November 19, 2018