Nissan, Mitsubishi drop Carlos Ghosn as chairman following his arrest

At a special board meeting held Thursday, directors at Nissan unanimously voted to drop Carlos Ghosn as the automaker's chairman and representative director.

The decision followed the arrest of Ghosn on November 19 on allegations of underreporting of personal income with financial regulators and misuse of company funds while running the Japanese firm.

Ghosn, who is credited with saving Nissan from bankruptcy at the turn of the century, is still being held pending an investigation into the allegations against him, allegations he has denied, Japanese public broadcaster NHK reported on Sunday.

Nissan is part of an alliance with Mitsubishi and Renault, with Ghosn having served as chairman at all three automakers and also CEO at Renault.

Mitsubishi directors voted Monday to drop Ghosn as chairman, while Renault has temporarily replaced him as chairman and CEO as the French firm awaits the results of the investigation.

At its board meeting on Thursday, Nissan directors also dropped board member Greg Kelly. In a statement following Ghosn's arrest, Nissan said Kelly was closely involved in the alleged misconduct, together with Ghosn.

The matter first came to light based on a whistle blower's report that was followed up by an internal investigation, Nissan said.

Executives from all three alliance partners are meeting in Amsterdam this week to deal with how to move forward, especially in regards to the potential power struggle between Nissan and Renault. Renault owns 43 percent of Nissan while the Japanese automaker only holds a 15 percent non-voting stake in the French firm—despite Nissan being almost 60 percent bigger than Renault by sales.

The situation came about due to Nissan's near bankruptcy in the late 1990s. Ghosn had managed to turn around an ailing Renault in very short time in the mid-'90s. He then oversaw Renault's initial purchase of a 36.8-percent stake in Nissan in 1999, at which point Ghosn then helped to turn around the Japanese firm's fortunes. As part of the deal, Nissan in 2001 bought its 15-percent stake in Renault. Mitsubishi was brought into the alliance in 2016 when Nissan purchased a 34-percent stake in its domestic rival following a fuel economy scandal in Japan.