Nissan said it has been providing information to the Japanese prosecutors and is cooperating fully with their investigation. The allegations also concern a Nissan representative director, Greg Kelly, it said.
The carmaker said it had initiated an internal investigation after a report by a whistleblower revealed misconduct by Ghosn and Nissan Representative Director Greg Kelly, alleging that the two executives had conspired to underreport Ghosn's salary for a number of years.
Shortly after the release of the reports, Nissan announced it was seeking the removal of Mr Ghosn over claims of "serious misconduct". Renault and Mitsubishi Motors, both of which Ghosn also chairs, have yet to respond.
He served as Nissan's chief executive from 2001 until April 2017, becoming chief executive of Renault in 2005, leading the two major automakers simultaneously. Renault didn't immediately respond for a request for comment.
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The news sent shockwaves through the auto industry, where Ghosn is a towering figure who is credited with turning around several major manufacturers and leads an alliance of Nissan, Renault and Mitsubishi.
"We need to really look back at what happened, take it seriously and take fundamental countermeasures", he said.
He promptly turned the struggling company around and was sent to do the same in North America before French auto manufacturer Renault, also flailing at the time, came knocking in 1996. Nissan's investigators have also uncovered "numerous other significant acts of misconduct", including Ghosn's personal use of company assets.
The 64-year-old executive, who is also chairman and CEO of Renault SA and chairman of Mitsubishi Motors Corp., is alleged to have understated his salary over five years from 2011.
Relations have eased since then, with the government approving a new mandate for Ghosn as Renault CEO in exchange for a 30 percent pay cut and the nomination of Thierry Bollore, his expected successor, as his deputy.
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Ghosn, 64, was until previous year the CEO and Chairman of Nissan, when he gave up the CEO role.
As head of the Renault-Nissan-Mitsubishi alliance, Ghosn has created an industrial behemoth, its combined 470,000 employees selling 10.6 million vehicles a year ago from 122 factories around the globe.
In June, Renault shareholders approved Ghosn's 7.4 million euro ($8.45 million) compensation for 2017.
Asked if Ghosn was a charismatic leader or a despot, Saikawa said that as an outsider, "He achieved much that many others could not do in reforms, especially in the beginning".
Ghosn has been contemplating his next career step as the companies look to change the pact's structure, possibly through a merger. Renault, Nissan, Mitsubishi Motors and AVTOVAZ together sold 9.96 million vehicles in 2016 - more than one in nine cars worldwide.
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The market value of both automotive companies took a hit at the open this morning in Europe, with Nissan losing 12% on the Frankfurt stock exchange and Renault falling by approximately the same amount in Paris.