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Nissan and Renault wrestle with the fallout from Ghosn’s arrest

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 French car maker Renault began making preparations Tuesday to fill the gap left by the arrest of Carlos Ghosn as a leadership crisis deepened inside the world’s biggest auto alliance.

Carlos Ghosn is the chief executive who is facing questions of alleged financial misconduct, according to a report by NY Times.

Prosecutors in Japan are investigating claims that Ghosn, who is also chairman of Nissan and Mitsubishi Motors, underreported his taxable income by half for several years.

One of the auto industry’s most prominent executives, Ghosn was arrested Monday in Japan and held for questioning, but has not yet been charged. The prosecutor’s office in Tokyo said it could hold him for 72 hours but, with a court’s approval, could extend the detention an additional 20 days before it decided whether to indict him.

Ghosn created the alliance of Renault, Nissan and Mitsubishi, and has been hailed for rethinking how vehicle manufacturers could share technologies and innovate in a competitive global market. His arrest stunned the sector and sent Nissan’s share price falling to a two-year low Tuesday.

But even as Nissan and Mitsubishi prepared to quickly sever ties with Ghosn, the French government, which is Renault’s biggest shareholder, was proceeding more cautiously.

The French economy minister, Bruno Le Maire, said Tuesday that Ghosn was “no longer in a position capable of leading Renault” because of his troubles in Japan.

But Le Maire said France had no evidence of the crimes that Ghosn has been accused of committing in Japan and would not call for his removal from the board of Renault, a French corporate icon. Renault board members were preparing to meet in an emergency session Tuesday.

In a joint statement released Tuesday afternoon, Le Maire and Hiroshige Seko, the Japanese economic minister, said that they had spoken by phone and “reaffirmed the strong support of the French and Japanese governments to the alliance formed between Renault and Nissan.”

Ghosn was detained on his private jet at Haneda Airport, which serves Tokyo, after a whistleblower at Nissan made allegations that he had underreported compensation to the Japanese government. Another executive, Greg Kelly, whom authorities described as the architect of the scheme, was also arrested.

Neither Ghosn nor Kelly could be reached for comment.

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