The Japanese carmaker had been investigating possible improper practices of Carlos Ghosn.

Highlights Carlos Ghosn has reportedly been arrested in Tokyo

Nissan said he used company money for personal use

Representative director Greg Kelly also accused of improper practices

Nissan Motor Co Ltd said on Monday it was moving to terminate Carlos Ghosn from his chairman's post after finding that he had used company money for personal use and committed several other serious acts of misconduct.

The Japanese automaker said that based on a whistleblower report, it had been investigating possible improper practices of Ghosn and Representative Director Greg Kelly for several months, and that it was fully cooperating with investigators.

"The investigation showed that over many years both Ghosn and Kelly have 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," Nissan said in a statement.

It said CEO Hiroto Saikawa would propose to the Nissan board to remove Ghosn and Kelly.

The Yomiuri newspaper reported that Ghosn had been arrested by Tokyo prosecutors on suspicion of under-reporting his salary. Earlier, several outlets had reported he was being questioned.

The news comes as a shock in Japan where Ghosn, a rare foreign top executive, is well regarded for having turned Nissan around from near bankruptcy. Ghosn is also chairman and chief executive of France's Renault.

The Asahi newspaper reported on its website that prosecutors had begun searching the offices of Nissan's headquarters and other locations on Monday evening.

The Tokyo District Public Prosecutors Office declined to comment.

Nissan said it would brief reporters on Monday evening. Spokesmen for Renault and the Renault-Nissan-Mitsubishi Motors alliance did not immediately return calls and messages seeking comment on the arrest reports.

An ouster of Ghosn, 64, is bound to raise questions about the future of the alliance that he personally shaped and had pledged to consolidate with a deeper tie-up, before eventually stepping back from its operational leadership.

Renault shares tumbled 13 percent in Paris to be among the worst performing stocks in Europe.

Nissan's German-listed securities plunged 12 percent.

Brazilian-born, of Lebanese descent and a French citizen, he began his career at Michelin in France, moving on to Renault. He joined Nissan in 1999 after Renault bought a controlling stake and became its CEO in 2001. Ghosn remained in that post till last year.

In June, Renault shareholders approved Ghosn's 7.4 million euro ($8.45 million) compensation for 2017. In addition to this, he received 9.2 million euros in his final year as Nissan chief executive.