Ghosn In Custody, Nissan, Mitsubishi Stock Plummet

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Former top Nissan Motor executive Greg Kelly, arrested with former chairman Carlos Ghosn over alleged financial misconduct, has said Ghosn's compensation was appropriate and had been discussed with other officials, public broadcaster NHK said on Saturday.

He received a visit from Brazilian consul Joao de Mendonca on Thursday who told AFP that Ghosn "sounded very well, in good health". Both were arrested after a Nissan investigation uncovered evidence of serious wrongdoing including under-reporting remuneration and personal use of company assets.

The management of the concern Nissan has also announced the creation of a special Commission for selection of candidates for the position of head of the Board of Directors. Exactly how that might occur is unclear, but the idea of an outright merger between Renault and Nissan - a deal that Ghosn had advocated for over opposition from Saikawa and others - is nearly certainly dead.

Ghosn and former Nissan Representative Director Greg Kelly are now being investigated in a case of alleged conspiracy to understate Ghosn's remuneration by about half the 10 billion yen he earned at Nissan over five years from fiscal 2010. The board won't name any new members to replace Ghosn and Kelly as so-called representative members, according to the people.

"At this stage, the board is unable to comment on the evidence seemingly gathered against Mr. Ghosn by Nissan and the Japanese judicial authorities", it said in a statement.

Nissan has always been unhappy about what it considers the outsize French role, and Saikawa made reference to that perceived imbalance at his late-night Monday press conference. Shares of Nissan, which is Japan's second-largest vehicle manufacturer, dropped as much as 6.5 per cent, while Mitsubishi shares slipped 6.9 per cent and Renault shares fell by as much as 4.8 per cent. French Finance Minister Bruno Le Maire said Wednesday that the partnership is set to continue and will be deepened.