Mitsubishi sacks chairman Carlos Ghosn after arrest

Chief executive Osamu Masuko will step into role temporarily

Carlos Ghosn is accused of understating his earnings by more than $40m (AFP)

Mitsubishi has sacked Carlos Ghosn from his role as chairman after his arrest last week over financial misconduct allegations.

The Japanese car manufacturer’s chief executive Osamu Masuko will become temporary chairman.

Formerly held in high regard for restoring Renault to good fortune in the Nineties, Mr Ghosn was arrested in Tokyo last week after an investigation appeared to show he understated his earnings by $44m.

Mr Ghosn was removed as Nissan chairman shortly after his arrest but remains in his position on Renault’s board. He denies the allegations.

Nissan allegedly paid huge sums to buy luxury houses around the world for its boss without any legitimate business reason.

Mr Ghosn’s removal also came amid reports that he was pursuing a merger between Nissan and Renault, a deal that some members of the Japanese company’s board did not want.

The scandal puts at risk the three-company alliance which last year became the world’s largest car manufacturer, when combined sales are taken into account.

Local media reported that Nissan created a secret team earlier this year to investigate Mr Ghosn’s expenses.

He is being held in a Tokyo detention centre after authorities successfully applied to extend his custody.

Nissan chief executive Hiroto Saikawa told staff on Monday that power was too concentrated around Mr Ghosn, a company spokesperson said.

The former Mitsubishi chairman had been credited with steadying the company after Nissan took a controlling stake in 2016.

At the time Mitsubishi had been damaged by revelations that it had used improper methods to calculate fuel economy for 25 years.