TOKYO — Carlos Ghosn, one of the auto industry’s most powerful leaders, lost another title on Monday when the board of Mitsubishi Motors removed him as chairman, one week after he was arrested in Tokyo on suspicion of financial misconduct.
Mr. Ghosn, who was stripped of the chairmanship of Nissan last week in a unanimous vote of the board, remains in a Tokyo detention center, where he sees his lawyer for about an hour or so each day. He is being questioned by prosecutors after Nissan said that he underreported his income to Japanese regulators over several years. He has not been charged with any crime.
In a statement on Monday, Osamu Masuko, chief executive of Mitsubishi, said the board had removed Mr. Ghosn because “he lost the trust of Nissan and he cannot execute his duties as chairman and representative director any longer.”
Mr. Masuko added that if Mr. Ghosn remained as chairman, it could expose Mitsubishi to “reputation risk.”
It has been a remarkably swift fall from grace for Mr. Ghosn. He has long been admired in Japan, where Nissan employs more than 22,000 people and Mitsubishi employs more than 30,000. He was known as the man who rescued Nissan, becoming one of his generation’s most successful chief executives as he orchestrated an alliance with Renault and Mitsubishi that effectively made the group the world’s largest seller of cars.
Prosecutors have also been questioning Greg Kelly, a former Nissan human resources manager who was also removed from the company’s board last week over allegations that he conspired with Mr. Ghosn to underreport Mr. Ghosn’s compensation in government securities filings and to use company funds for personal expenses. Nissan has described Mr. Kelly as “the mastermind of this matter, together with Carlos Ghosn.”
In his first remarks to the news media, Yoichi Kitamura, a lawyer representing Mr. Kelly, said his client denied the allegations. “He said he hasn’t intentionally understated the executive compensation that should be disclosed in the securities report nor instructed others to do so,” Mr. Kitamura said in an interview with The New York Times.
Mr. Kitamura said Mr. Kelly would be held until at least Friday but that his detention could be extended after that for 10 days. He said he expected that prosecutors would eventually get an indictment after extending the period of questioning.
Like Mr. Ghosn, Mr. Kelly is being held in a room of about 50 square feet. “The room is very small,” Mr. Kitamura said. “It is inhumane.”
Mr. Ghosn has not been allowed to see any family members, although he has been visited by the French ambassador and the Brazilian consul general. Mr. Ghosn holds both French and Brazilian citizenship.
His lawyer in Japan, Motonari Otsuru, did not return calls seeking comment. Former prosecutors have described the interrogation process, in which suspects are not allowed to have their lawyers present during questioning.
Some critics have questioned the way in which Mr. Ghosn has been detained. Speaking to reporters at the Foreign Correspondents’ Club of Japan on Monday, Nobuo Gohara, a former prosecutor, described the Tokyo public prosecutor’s office as “very reckless and dangerous.”
“I would have thought being careful would be the norm,” Mr. Gohara said. “But in this case, I feel they have not been careful.”
Mr. Gohara said he was concerned that prosecutors had not assembled enough evidence to support an arrest.
The news of Mr. Ghosn’s arrest and detention has roiled business communities in Japan and France, where Renault, Nissan’s largest shareholder, is to conduct an internal audit of Mr. Ghosn’s finances this week, Bruno Le Maire, the French economy minister, said Sunday. The French government owns 15 percent of Renault.
Mr. Le Maire said that Nissan had yet to share details of Mr. Ghosn’s alleged misdeeds with the French government and Renault, where Mr. Ghosn remains chairman and chief executive. “We have no information,” Mr. Le Maire told BFM television.
Renault and Nissan executives are planning to gather Wednesday in Amsterdam for a routine operations meeting. While the meeting was scheduled before Mr. Ghosn’s arrest, they are likely to discuss the fate of the alliance.
The Japanese news media reported that Hiroto Saikawa, Nissan’s chief executive, told workers in a company meeting Monday morning that he wanted to review the alliance with Renault, which owns 43 percent of Nissan, because it is “not equal.” According to news reports, he told employees that he wanted the alliance to better reflect “the will of Nissan.”
At a news conference at Nissan headquarters on Nov. 19, the night of Mr. Ghosn’s arrest, Mr. Saikawa told reporters that he had been reflecting on Nissan’s corporate governance and in “what manner did power concentrate with Mr. Ghosn.”
Reporting was contributed by Liz Alderman from Paris, and Makiko Inoue, Hisako Ueno and Shunta Takino from Tokyo.
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