The allegations also concern another Nissan executive, its representative director Greg Kelly.

Among the best paid executives in both Japan and France for several years, Ghosn's compensation has regularly drawn criticism.

Financial statements show Ghosn's salary dipping from $9.7 million (1.09 billion Japanese Yen) in 2016 to $6.5 million (730 million JPY) in 2017, a reduction of almost 33 percent.

Under Ghosn, the three auto companies together formed an alliance that rivals Volkswagen (VKLAF) and Toyota (TM) in terms of vehicle sales.

"These two gentleman are arrested this evening, that's what I understand", Saikawa said at the press conference. He told reporters that the investigation had identified "serious misconduct".

The company said its investigation found that Ghosn, 64, and the other board member, Greg Kelly, had been under-reporting Ghosn's compensation. Ghosn gave up his role as CEO of Nissan last year and has said that he may step down as CEO of Renault before his four-year term ends in 2022, fuelling speculation the alliance could lose its architect and main leader of the past two decades.

While there could be some scrutiny of the relationships between the companies, they're so intertwined now that cutting them apart would be hard, said Kelley Blue Book analyst Michelle Krebs.

Kelly was also arrested on November 19 on suspicion of conspiring with Ghosn to under-report the Nissan chairman's income on annual securities reports. Stueber has more than 20 years of experience including previously serving Bank of Hawaii from 1994 to 2000 as vice president, sales manager and investment program director of Bancorp Investment Group.

He is credited with saving Nissan from bankruptcy through measures including closing plants and restructuring, and he has instant name recognition in Japan, where he is a rare high-profile foreign executive. They are accused of under-reporting the size of Ghosn's compensation package "over many years", and Ghosn is accused of using company money for personal expenses.

Earlier Monday, Japan's Asahi News reported that Brazil-born Ghosn was to be arrested following an alleged violation of Japan's financial instruments and exchange act. However, they added that he reported only half that: about $44 million. His annual pay dropped to 735 million yen ($6.5 million) in 2017, down more than 30 percent. Known for his flair and confidence, Ghosn won respect for his business acumen and for shaking up Nissan's traditional corporate culture. She has 10 years' experience in audit and financial services.

French President Emmanuel Macron listens to Carlos Ghosn, the CEO of French vehicle maker Renault, left, at the Renault stand during an official visit at the Paris Motor Show, in Paris, France, Oct. 3, 2018.

Ghosn began his career at Michelin in France, moving on to Renault.

However, he made enemies of French labor unions and some politicians. One Japanese media outlet, Yomiuri Shimbun, reported Monday that Ghosn has now been arrested. Since 2016, Nissan has held a 34 per cent controlling stake in its smaller Japanese rival, Mitsubishi.