Nissan shares hit as chairman Carlos Ghosn held over £34.5m pay claims

Nissan shares have hit a two-year low as its chairman Carlos Ghosn remains in custody over a series of claims including a failure to declare £34.5m in earnings.

The executive known as "Le Cost Killer", for taking a ruthless attitude to business turnarounds, was arrested on Monday after a private flight in to Tokyo.

He is being questioned on allegations he under-reported his income to the authorities and misused company funds.

Nissan, which called in the authorities after an audit inspired by a whistleblower, has refused to divulge the amounts involved in the spending claim though state broadcaster NHK said it included the purchase of homes for Mr Ghosn in four countries.

:: Carlos Ghosn arrested over 'serious misconduct' claim

The scandal will result in him being formally dismissed by the Nissan board on Thursday, the company said.

Its investors got their first chance to react to the news on Tuesday - with shares falling 6% at one stage, alongside those of Mitsubishi (LSE: 7035.L - news) .

Mitsubishi, of which Mr Ghosn is also chairman, is also set to cut him loose while Renault (LSE: 0NQF.L - news) 's board is due to meet soon to decide if he can remain its chief executive and chairman.

The French government has a 15% stake in Renault. The country's finance minister, Bruno Le Maire, left no doubt about his views on Mr Ghosn's future when he told reporters he was "no longer in a position to lead the group".

The French brand confirmed its board would consider appointing an interim leader at a meeting later on Tuesday.

Industry observers say the very future of the Nissan, Renault and Mitsubishi alliance - aimed at sharing costs and technology - is threatened by the scale of the alleged wrongdoing.

Nissan's chief executive admitted Hiroto Saikawa conceded at a news conference on Monday that too much power had been placed in one man's hands since 2005.

Mr Ghosn - the architect of that partnership - is yet to comment on the allegations he faces.

A second Nissan executive, Greg Kelly, also remains in custody on suspicion of aiding Mr Ghosn.

The men can be held without charge for 48 hours in Japan but that can be extended by up to 20 more days.