Renault boss Carlos Ghosn remains in job after arrest over £34m pay claims

Renault boss Carlos Ghosn remains in his job following his arrest in Tokyo for allegedly failing to disclose £34.5m, the car firm has announced.

The company's chairman and chief executive is still in custody as officials investigate allegations the car industry veteran, who also chairs the boards of Nissan and Mitsubishi, failed to disclose the money to the Japanese authorities.

Nissan has also alleged the 64-year-old, known as "Le Cost Killer" for taking a ruthless attitude to business turnarounds, misused company funds - reportedly through the purchase of homes in four countries.

He is set to be sacked by the Japanese firm at a board meeting on Thursday.

Senior executives at Renault appeared to be on a collision course with the French government, which owns a 15% state in the car company, after they refused to replace Mr Ghosn before anything was proved.

The French finance minister demanded that an interim chief was brought in.

A statement from Renault's board of directors said that while Mr Ghosn was "temporarily incapacitated" he remains chairman and chief executive officer (CEO).

In his absence Thierry Bollore has been appointed as deputy CEO and will have the same powers as Mr Ghosn, it added.

:: Carlos Ghosn arrested over 'serious misconduct' claim

Renault's board said Nissan has agreed to "provide all information in their possession arising form the internal investigations related to Mr Ghosn...on the basis of transparency, trust and mutual respect set forth in the Alliance Charter".

Nissan investors got their first chance to react to the news on Tuesday - with shares falling 6% at one stage, alongside those of Mitsubishi.

Renault shares later fought back to close just over 1% lower on the day following steep losses on Monday.

Mitsubishi, of which Mr Ghosn is also chairman, is also set to cut him loose.

Things were initially less clear at Renault, until the board, led by an independent director, decided to back their boss.

France'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".

But it emerged ahead of a Renault board meeting that Mr Ghosn, who is not accused of any wrongdoing in France, had strong support among top management.

A memo to staff obtained by the Financial Times quoted Mr Bollore as saying: "On your behalf, we (the board) would like to state here our full support for our chairman and CEO."

It also committed Renault's future to the three-way partnership spearheaded by Mr Ghosn.

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.