Carlos Ghosn, the top executive of the Renault F1 team's parent car manufacturer, has been arrested in Japan.
State prosecutors had earlier questioned the Renault-Nissan-Mitsubishi CEO on suspicion of under-reporting his $10 million salary.
"Numerous other significant acts of misconduct have been uncovered, such as personal use of company assets," Nissan confirmed.
As a result, Nissan moved to "promptly remove Ghosn from his positions as chairman".
Renault shares in Paris plunged 13 per cent after the news broke, and French president Emmanuel Macron said that with France being a shareholder, he will focus on "the stability" of the Renault company.
It is not clear what impact the news will have on Renault's works F1 team.
But F1 correspondent Luis Vasconcelos wrote in Turun Sanomat newspaper: "Ghosn has been against the F1 project, so his departure would have hardly any impact."