Nissan Motor Co.'s long-serving boss Carlos Ghosn will be held for longer in custody, Japanese authorities said Wednesday, as more allegations of financial misconduct have surfaced against him and widened the scope of a probe that could potentially have a major influence on the global automotive industry's future landscape.

According to sources with knowledge of the situation, Ghosn is suspected of underreporting the amount of his remuneration by billions of yen also over the past three years, although the company's annual securities reports stated that the sum was about 2.9 billion yen.

He was arrested by Tokyo prosecutors Monday on suspicion of understating nearly 10 billion yen ($88 million) in compensation as about 5 billion yen over five years from the business year ending in March 2011.

The Tokyo District Court approved Wednesday a request from the prosecutors to hold the 64-year-old company chairman for an additional 10 days.

French Ambassador to Japan Laurent Pic met with Ghosn at the Tokyo detention center on Tuesday, according to an embassy official.

The court also allowed the prosecutors to extend the detention of Nissan Representative Director Greg Kelly, a 62-year-old close aide to Ghosn who was arrested with him, for the same period.

On Thursday, Nissan will hold an extraordinary board meeting to dismiss the charismatic auto industry figure, who brought the Japanese automaker back from the brink of bankruptcy in the late 1990s, as chairman.

As Nissan executives are expected to discuss the company's new management team and remuneration system, as well as the future of its tie-up with Renault SA, Japanese industry minister Hiroshige Seko is scheduled to hold talks with French Finance Minister Bruno Le Maire in Paris on Thursday.

The French government, which has the largest stake in Renault at 15 percent, has said that keeping the tripartite alliance, also involving Mitsubishi Motors Corp., benefits both countries.

Renault owns a 43.4 percent stake in Nissan, which holds a 15 percent stake in the French automaker and 34 percent in Mitsubishi Motors.

During the five-year period, Ghosn, also chairman of Renault and Mitsubishi Motors, is suspected of not stating in the securities reports more than 100 million yen worth of annual remuneration from a Dutch-based subsidiary, according to the sources.

While the amount is much smaller than what the sources suggested Tuesday he is believed to have gained from stock price-based compensation, the prosecutors allege the subsidiary played a pivotal role in the financial scandal that has erupted at the Japanese automaker.

Nissan did not mention in the financial statements billions of yen Ghosn is believed to have earned from stock appreciation rights, a scheme similar to stock options that gives bonuses to executives if the company's share price rises above a certain level.

The amount of stock-related pay makes up much of the 5 billion yen in remuneration the prosecutors allege Ghosn understated during the period in violation of Japan's Financial Instruments and Exchange Act.

The stock rights were given to Nissan executives after the bonus scheme was approved at the company's shareholders meeting in June 2003.

Ghosn is also suspected of having used residences in Brazil, France, Lebanon and the Netherlands purchased by the subsidiary and other entities without paying rent or reporting that benefit as part of his compensation.

(An apartment believed to have been used by Ghosn on Copacabana Beach in Rio de Janeiro)

(A house in Beirut, Lebanon, used by Ghosn)

Ghosn was born in Brazil and spent much of his childhood in Lebanon before receiving higher education in France, where he acquired citizenship.

The prosecutors view that his alleged receipt of income from the subsidiary and bonus scheme, as well as the benefit, should have been reported as part of his remuneration.

Believing the Dutch-based unit played a central role in the alleged misconduct, they are investigating how it was set up and the extent of involvement of Representative Director Kelly, who was an attorney for a U.S. law firm before joining the automaker in 1988, according to the sources

An executive in charge of legal affairs under Kelly was involved in the purchases of the overseas residences, the sources said.

Following a months-long internal probe triggered by a whistleblower report, Nissan said Monday that Ghosn's "significant acts of misconduct" such as "personal use of company assets" and Kelly's "deep involvement" were uncovered.

To carry out the high-profile investigation, the prosecutors have struck a plea bargain agreement with the executive.

Despite the agreement, the prosecutors are considering whether to build a case against Nissan, given that the securities reports had been submitted to the Kanto Local Financial Bureau for a long period, the sources said.

The violation of the financial law could entail a punishment of up to 10 years in prison, a fine of up to 10 million yen, or both.

Under the law, a company could face a fine of up to 700 million yen.

Kelly is believed to have instructed the executive and other officials to make false statements in the Japanese automaker's securities reports.

Nissan's total amount of executive compensation should not exceed about 3 billion yen, as it has set a shareholder-approved ceiling.

The amount actually paid to its executives was less than 2 billion yen every year. The sources also said Ghosn, who effectively decided how the compensation should be divided among its executives, might have received part of the difference of about 1 billion yen and did not report it.

Not only Nissan, but also Mitsubishi Motors is expected to dismiss Ghosn next week, while Renault on Tuesday named Chief Operating Officer Thierry Bollore as acting CEO to lead the French manufacturer's management on a temporary basis without ousting Ghosn.

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