Carlos Ghosn, chairman of Nissan Motor Co for nearly two decades and Japan’s most celebrated foreign executive, has been arrested.

Mr Ghosn (64) is suspected of under-reporting his income by millions of dollars, breaching Japan’s financial trading law, according to the Asahi newspaper.

Broadcaster NHK said the Brazilian-born executive was formally arrested on Monday after voluntarily presenting himself to Tokyo prosecutors. It is understood he met the prosecutors by arrangement at Haneda Airport, while entering the country.

Nissan is already preparing to sack Mr Ghosn following an internal probe that revealed serious financial misconduct “over many years”, the company said in a statement. An extraordinary board meeting will be held on Thursday.

The carmaker’s chief executive, Hiroto Saikawa, told a packed press conference on Monday that he felt “despair and indignation” at the discovery, which he blamed on Mr Ghosn’s “long regime”.

Nissan’s recovery, said Mr Saikawa, was thanks to the “hard work of many, many people and not just one individual”. He added that the company would now work to eliminate “overconcentration” in the hands of one man.

Renault share price

Mr Ghosn is also chief executive of Renault, Nissan’s French partner, and chairman of Japanese carmaker Mitsubishi Motors. News of his stunning fall from grace sent the share price of Renault down 15 per cent in France. Japanese stock markets had closed by the time the story broke.

The Nissan statement said Mr Ghosn and Greg Kelly, a director of the group, have been under-reporting compensation amounts in securities reports to the Tokyo Stock Exchange “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,” the statement added.

Mr Ghosn became president of Nissan in 2000 after being assigned to turn it around by Renault, which owns 42 per cent of the Japanese firm. He quickly slashed excess capacity, shut five factories and eliminated 21,000 jobs, earning him the moniker “Le Cost Cutter”, a nickname he reportedly dislikes.

His strategy of using savings from these measures to invest back into a slimmed-down line-up of car and truck models is widely credited with pulling the company out of the fire and made him one of the most popular executives in Japan.

His superstar status was confirmed in 2001 when he was featured in a superhero comic book.

Mr Ghosn’s decision to add scandal-tainted Mitsubishi Motors to his portfolio in 2016 (when Nissan took a 34 per cent stake) triggered concerns that he was overstretching. As chief executive and chairman of the three-way alliance, he effectively controlled one of the world’s biggest carmakers.

He recently married for a second time and hinted at his gradual retreat from the industry.

Nissan said it had been alerted to the misconduct by a whistleblower and had referred the case to the Tokyo public prosecutor’s office after its own investigation. Mr Ghosn was under investigation for breaching the financial instruments and exchange law, possibly by making false entries on corporate statements.

The case will be closely followed in Japan. One of the mysteries to be cleared up is why one of the nation’s most extravagantly paid bosses felt the need to further pad his bank account – at great personal risk.

Public accounts show Mr Ghosn had a multimillion-euro pay package for his combined roles in Nissan, Renault and Mitsubishi – in a country where executive pay is traditionally modest.