Nissan and Mitsubishi shares plunged Tuesday, as the automakers prepared to oust Chairman Carlos Ghosn a day after he was arrested for alleged financial misconduct.

Ghosn's arrest sent shockwaves through the auto industry, where he was a towering figure, as well as Tokyo markets, which opened lower as Nissan fell more than six percent.

And his legacy appeared in danger of total collapse, with his own handpicked successor as Nissan CEO accusing Ghosn of accruing too much power, in what he called the "dark side" of his leadership.

The spectacular fall of the Brazil-born executive also raised questions about the future of the sometimes fractious alliance he led of Nissan, Mitsubishi and Renault.

Both Nissan and Mitsubishi have said they will propose his removal as chairman, with Renault's board also meeting to discuss his fate.

On Tuesday there were still many unanswered questions about the allegations against a man long credited with an almost magical ability to turn around ailing auto companies.

Nissan's CEO said a months-long investigation prompted by a whistleblower had uncovered years of financial wrongdoing, including under-reporting of Ghosn's salary and misuse of company assets.

Prosecutors said they were holding him as they investigated allegations he had under-reported his income by around five billion yen (44.5 million US dollars) over five years.

The shock of his arrest was compounded by the harsh language leveled against him by Nissan CEO, Hiroto Saikawa, who in a press conference accused Ghosn of accruing too much power.

"Too much authority was given to one person in terms of governance," he told reporters at Nissan's headquarters in Yokohama on Monday.

"I have to say that this is a dark side of the Ghosn era which lasted for a long time."

Saikawa said he was still thinking through whether Ghosn was "a charismatic figure or a tyrant."