Renault of France’s stock price fell almost 10% after news CEO Carlos Ghosn was arrested in Japan over suspected financial violations.
Ghosn is also chairman of Nissan Motor of Japan and heads up the Nissan Renault alliance, which also now includes Mitsubishi Motors.
Investors worried that the long hoped for a full merger between Nissan and Renault might not happen.
In later trading on Monday, Renault shares recovered a bit to 58.72 euros, a 9% fall.
Nissan said it will seek Ghosn’s removal over allegations he used company money for personal use, after an investigation.
“The investigation showed that over many years both Ghosn and (Greg) 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.
“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,” the company said.
Neither Ghosn or Kelly commented on the charges.
According to Citi Research, Ghosn is viewed as the chief architect of the long-term revival of once ailing Nissan and the alliance with Renault, but it would survive without him.
