The French finance minister said Carlos Ghosn was no longer able to lead Renault after the executive, one of the leading figures in the global automotive industry, was arrested on Monday by Japanese prosecutors.
"Carlos Ghosn is no longer in a position to drive Renault," Finance Minister Bruno Le Maire told French radio. "Renault has been weakened, which makes it even more important to act quickly."
The Council ruled on Tuesday, and Le Maire calls on a group in which the French government has a 15% share to create a temporary management structure. Le Maire said he had asked the French tax authorities to review the Ghosno affair and found nothing special.
Ghosn is accused of underestimating his income and being exposed to an informant in a move that shocked the global automotive industry.
The French-Brazilian powerhouse, which has grown in the automotive industry over the past decades, has created an alliance between French Renault and Japanese Nissan and Mitsubishi, which have created the world's second-largest automaker. He is Chairman of Nissan, Chief Executive Officer and Chairman of Renault and Mitsubishi Chairman.
Nissan said on Monday that Ghosn would fire this week, while the Mitsubishi Board will meet next week.
Nissan shares plunged in Tokyo on Tuesday and ended almost 5.5% and dragged the Nikkei index to a three-week low. Renault's shares fell by another 3% after losing more than 8% on Monday.
Japanese prosecutors confirmed on Tuesday that they are investigating whether Ghosn and other Nissan CEO Greg Kelly have underestimated Ghosna's earnings in five years since 2010. They are accused of reporting only half of Ghosn's actual salary of nearly 10 billion yen) for the period. Ghosn is also accused of personal use of company assets.
Japanese public-service station NHK said that Nissan paid "huge sums" for the purchase of luxury homes for Ghosn in four cities around the world. The properties in Rio de Janeiro, Beirut, Paris and Amsterdam were acquired "without any legitimate business reason".
Ghosn's fall is expected to spark a battle between Japan and France to control the alliance of Nissan-Renault-Mitsubishi.