The past few months hav been rough for Nissan (NSANY  ) since former Chairman Carlos Ghosn's arrest in Japan on November 19 for underreporting his income from Nissan. The discrepancy in accounting caused Ghosn to be removed from Nissan's board and the loss of his executive rights. Director Greg Kelly has also faced similar accusations. Ghosn, a French citizen who arrived to Nissan after a strategic partnership was formed with France-based automaker Renault (RNLSY  ) in 1999. Ghosn funneled company funds through a shell company called Zi-A Capital BV, using them on personal assets such as beachfront apartments and mansions. Additionally, Kelly assisted Ghosn structure certain deferred payment plans that exploited loopholes in the disclosure rules, resulting in the siphoning of around $80 million.

Now, other incriminating information has come to light regarding Khaled Al-Juffali, a Saudi businessman who helped Ghosn with his financial troubles. In 2008, Ghosn attempted to mitigate personal losses from bad investments of about $16.6 million by having Al-Juffali arrange for a letter of credit to siphon $14.7 million from Nissan's account, over a period of 4 years. "By doing so, [Ghosn] behaved in a way that breached trust, and inflicted damage on the property of Nissan," said Tokyo prosecutors.

Reacting to allegations, a Nissan spokesman said: "We cannot comment on matters related to Ghosn's arrest for breach of trust. Nissan's own investigation is ongoing, and its scope continues to broaden."

In order to ameliorate the situation and assuage shareholders representing Renault, which is the largest shareholder in Nissan, Nissan updated its corporate governance code to reflect more desirable changes in light of Ghosn's arrest. The main policy change pertained to cross-shareholder clauses, which were clarified and made more explicit for both automakers: "We will investigate including the option of sale of the shares when continued possession of the shares is judged to be inappropriate as a result of verification of the propriety of such cross-shareholdings," the code also said.

"The policy itself has not changed in any way, and the clarification does not refer to alliance partners, but rather to the company's holdings in certain other listed companies," Nissan said in a written statement. "Nissan is one of hundreds of listed companies in Japan issuing an update at this time in this manner."

The clarification has consoled investors to an extent, as the Nissan stock rose by almost 3.5% upon the announcement in Tokyo. It seems as though the Renault-Nissan-Mitsubishi Alliance will not be completely uprooted by the allegations, as Nissan management continues to adjust legal stipulations to allay Renault's concerns. Even so, the uneven corporate structure of the partnership between Renault and Nissan could be a point of tension in the future, especially since France has voting rights for Renault but the opposite is not true. Prosecutors are continuing investigations against Ghosn.