Tokyo prosecutors believe Ghosn's underreporting of his remuneration constitutes a violation of the Financial Instruments and Exchange Act.
Saikawa said Nissan's board will vote Thursday on dismissing both Ghosn and Kelly, who he described as the "mastermind" of the alleged abuses.
Also on the chopping block is Nissan representative director Greg Kelly, who was discovered to be "deeply involved" in reporting compensation amounts in the Tokyo Stock Exchange securities report that were less than the actual amount.
The pair had been under investigation by Nissan for several months after receiving a whistleblower report which claimed Ghosn's misconduct had spanned over the course of several years.
The company said it had provided information to Japanese prosecutors and would recommend that the board of directors "promptly remove Ghosn from his positions" along with Kelly.
Ghosn is suspected to have under-reported his pay package in the company's financial reports for the goal of dissimulating his true compensation. In 2016, Ghosn became Mitsubishi Motors' chairman.
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Born in Brazil, Ghosn joined French carmaker Renault in 1996 before he assumed the title of chief operating officer for Nissan in 1999. CNN wasn't immediately able to reach Ghosn, Kelly or their representatives for comment. Ghosn is also chairman and chief executive of France's Renault. "We will continue our work to identify our governance and compliance issues, and to take appropriate measures", it said. Before joining Renault, Ghosn worked for Michelin North America.
In the latest furore over his finances, Japan's Nissan Motor Co Ltd said on Monday it planned to oust Ghosn as chairman after alleging he had made personal use of company assets, among other acts of suspected misconduct.More news: Artists pay tribute to the one and only Stan Lee
According to NHK and the Kyodo News Service, Ghosn made almost 10 billion yen ($89 million) over five years through March 2015, including salary and other income from the company, but reported as if he only made 5 billion yen ($44 million), or half of what he had received.
Renault, which reported a record profit for 2017 earlier this year, also announced that Ghosn would stay on as CEO until 2022 but with a 30% pay cut.
Ghosn was one of the first executives to champion electric cars, and he also developed a range of low-priced cars for emerging markets.
As well as being chairman of Nissan - which owns Britain's biggest vehicle plant in Sunderland - Mr Ghosn is also chairman and chief executive of Renault and chairman of Mitsubishi Motors.
Renault shares tumbled more than 10 percent in Paris, while Nissan's German-listed securities fell nearly 10 percent.
Ghosn is also chairman of Mitsubishi Motors. For 2017, for instance, Ghosn demanded a 7.4m euro ($8.5m) package for his role, but the French government pushed back.
Ghosn's pay has come under scrutiny before, with the French government previous year objecting to his $9 million package as CEO as Renault.
Nissan was losing $1,000 for every auto it sold in the U.S., Ghosn wrote in a 2002 Harvard Business Review article about his efforts. Ali Kaya, who heads the CGT union at a Renault factory in Flins outside Paris, said "the most shocking thing is that these people were not arrested well before this".