Carlos Ghosn will remain chairman and CEO of Renault despite being detained in Japan on allegations he misused assets of partner Nissan Motor Co. and under-reported millions of dollars in income.
The French carmaker's board of directors announced its decision after an emergency meeting in Paris on Tuesday.
The board, however, said it was appointing the automaker's No. 2 executive, Chief Operating Officer Thierry Bollore, to temporarily fill in for Ghosn.
"Mr. Ghosn, temporarily incapacitated, remains chairman and chief executive officer," a statement from Renault's board said. But while Ghosn deals with his legal issues in Japan, Bollore will have the same authority to run the company as the CEO, it added.
Renault's board said its decision was made with an eye toward keeping the company on a steady course "to preserve the interests of the group and the continuity of its operations."
Japanese prosecutors were considering Tuesday whether to file formal charges against Ghosn.
Ghosn runs Renault, Nissan and the Renault-Nissan-Mitsubishi alliance that he helped turn into the world's biggest car-seller last year, and both France and Japan want to keep it intact.
Renault's move to appoint a temporary leader was in line with a demand by the French government, which owns a 15 percent stake in the automaker. Finance Minister Bruno Le Maire had said earlier Tuesday that Ghosn was not in position to lead the Renault Group while fighting the accusations in Japan.
The decision not to part ways with the CEO may also reflect the esteem in France for Ghosn, who recently met with President Emmanuel Macron, and had met with four past presidents.
Renault's board, meanwhile, said it is requesting that Nissan pass along details of its investigation into Ghosn's alleged wrongdoing.
Japanese prosecutors said they were holding Ghosn, 64, for allegedly collaborating to falsify securities statements and underreporting $44.6 million in income from 2011 to 2015. A second Nissan executive, Greg Kelly, was also suspected of collaborating with him.
Le Maire said authorities have examined Ghosn's tax situation in France but have found no wrongdoing.
Bollore, a member of Renault's executive committee, joined Renault in September 2012 and was named chief operating officer only last February. He has a long career with both tiremaker Michelin and auto parts company Faurecia, spending time in Asia with each.
There was no word from Ghosn himself. Japanese prosecutors have refused to say where he is being held.
The prosecutors, who reportedly arrested Ghosn after questioning him upon his arrival by private jet at Tokyo's Haneda airport, have 48 hours from the time of his arrest Monday to decide whether to press charges. They can hold a suspect for up to 20 more days per charge if they decide they need more time.
Nissan's board was due to meet Thursday to consider dismissing Ghosn and Kelly. Earlier this year, Ghosn signed a contract that would have run through 2022.
Of French, Brazilian and Lebanese background, Ghosn also is a towering corporate figure in France, where Renault is one of the heavyweight industrial survivors. No major economic event in France was held without Ghosn.
Ghosn's Lebanese heritage is a source of pride in Lebanon, and in Beirut the foreign minister, Gibran Bassil, issued a statement saying the Lebanese ambassador to Tokyo was told to look out for "the model of Lebanese success abroad."
In Japan, where foreign executives are scarce and even the biggest corporate bigwigs tend to keep a low profile, Ghosn's status is more ambiguous.
He is admired for driving a turnaround at Nissan when it was near bankruptcy and for his foresight in pushing to bring electric and autonomous cars to the masses.
But in a 90-minute news conference late Monday night, Nissan CEO Hiroto Saikawa said Ghosn had too much power and the company was overdue for some change.
Public broadcaster NHK said Ghosn was in charge of allocating pay among Nissan's top executives and is suspected of siphoning off some of that compensation.
He also is suspected of underpaying his share of rent and misusing company funds on his company-issued housing in Lebanon, Paris, Amsterdam and Rio de Janeiro, where his apartment is on the wealthy Copacabana beach strip.
Ghosn's compensation from Nissan, generous by Japanese standards, was only part of his overall income since he also has salaries from alliance partners Renault SA and Mitsubishi Motor Corp.
Repeatedly questioned over how the company could have let financial misconduct persist for so long, Saikawa said systems inside Nissan limited transparency.