The chairman of Japanese automaker Nissan has reportedly been arrested in Tokyo.
The car company said it is seeking to remove Carlos Ghosn from his position amid a series of allegations – including that he under-reported his income "over many years."
He is also accused of using the business’s money for personal use.
Japanese Broadcaster NHK has reported that Mr Ghosn, who is also chief executive and chairman of Renault, was arrested in Tokyo.
In a statement, Nissan said it had been conducting an internal investigation over the past several months regarding misconduct involving Mr Ghosn and another director Greg Kelly.
“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,” it said.
“Also, in regards to Ghosn, numerous other significant acts of misconduct have been uncovered, such as personal use of company assets, and Kelly's deep involvement has also been confirmed.
“Nissan has been providing information to the Japanese Public Prosecutors Office and has been fully cooperating with their investigation. We will continue to do so.”
Nissan CEO Hiroto Saikawa will now urge the company board to remove both men from their positions.
Mr Ghosn is seen by many observers as the most powerful executive in the automotive industry.
He oversees the alliance involving Nissan, Renault and Mitsubishi and has led recoveries at all three brands.
Mr Ghosn, who was born in Brazil, made his name after taking the top job at Nissan in 2001 and was credited with leading its fightback from near bankruptcy.
“Nissan deeply apologizes for causing great concern to our shareholders and stakeholders,” said the company statement.
“We will continue our work to identify our governance and compliance issues, and to take appropriate measures.”
Renault shares hit their lowest level in more than four years on news of the scandal - down almost 15%.
Trading in Nissan shares had already ceased for the day.
Additional reporting from IRN