Ghosn's legal woes highlight governance failings in Japan

One of the biggest mysteries surrounding the arrest of Nissan's former chairman Carlos Ghosn is over how he allegedly could have under-reported his income by millions of dollars for years and why the company is going after the suspected wrongdoing now.

Ghosn, who headed the Renault-Nissan-Mitsubishi Motors auto alliance, was arrested November 19 on suspicion he underreported his income by $44 million over five years or about half of what he was really making.

READ: From cars to prison bars: Carlos Ghosn's Japanese cell

Nissan Motor Co. and Mitsubishi have ousted him as chairman; the board of Renault SA of France says it's waiting for more evidence.

Nissan is among a growing list of top-name Japanese companies whose corporate governance has been found lacking in recent years. Experts say Japan needs independent oversight for executive pay, among other reforms.