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Renault says sorry to execs over false spy claims

French carmaker Renault made a public apology to three executives accused of industrial espionage after the Paris prosecutor said the trio had no case to answer.
/ Source: Reuters

French carmaker Renault made a public apology to three executives accused of industrial espionage after the Paris prosecutor said the trio had no case to answer.

Bank accounts in Switzerland and Liechtenstein, alleged to have belonged to the executives and seen as key to the case over Renault's electric car technology, did not exist, prosecutor Jean-Claude Marin told a news conference on Monday.

The response of authorities in those countries has enabled the prosecutor "to dismiss a certain number of theories, notably that which was put forward in the initial complaint by the company Renault," Marin said.

Renault Chief Executive Carlos Ghosn and Chief Operating Officer Patrick Pelata apologized to the three men following Marin's comments, pledging to repair the injustice against them after they were fired in January.

Bertrand Rochette, Matthieu Tenenbaum and Michel Balthazard had denied any wrongdoing from the start and have taken legal action against the carmaker.

"They (Ghosn and Pelata) are committed that reparations be made to the three executives, and that their honor in the public eye be restored," Renault said in a statement.

Marin said the investigation was now focusing on whether Renault was the victim of fraud as no evidence had emerged backing its complaint of espionage.

The Paris prosecutor said Renault had already paid 310,000 euros for false information and had 390,000 euros more to pay.

"Renault is pressing charges, and has filed for a civil action, in the case of organized fraud," Renault said.

Renault also confirmed it had convened a special board meeting on Monday and said it would make a statement afterwards.

The carmaker's management will face consequences now the case is unraveling. Pelata has hinted his own job may be at risk, saying Renault would accept all the consequences "up to the highest level of the company, that is to say up to myself."

The 15 percent state-owned carmaker came under fire for carrying out its own investigation into suspected spying before informing the authorities of its fears.

The case briefly caused tensions with China after a government source said investigators were following up a possible link with China before a formal inquiry was launched. Renault and the government subsequently played down talk of the link and China angrily denied any involvement.

A Renault security manager was on Sunday placed under investigation for suspected fraud concerning the spying allegations.

One analyst, who asked not to be named, said COO Pelata was "not necessarily irreplaceable, but it would still be a significant shock" if he stood down over the affair.

The case also affects Carlos Ghosn, the dynamic CEO of Renault and its partner Nissan Motor.

Early on he spoke out, saying the carmaker had "multiple pieces of evidence" for its allegations. But in February he said he had not taken part personally in the investigation.

"If every time something happens in a company you had to take your pen and go and look into it to be sure of what people are telling you the company would cease to exist," he said.

Ghosn is seen as crucial to the Renault-Nissan alliance, however: "Ghosn is today the only real cement holding the alliance together," the analyst said.

"In my view it would not be possible for any one person to take over the two roles of Renault CEO and Nissan CEO, so we would perhaps be in a situation in which the two groups would grow apart instead of coming closer together," he added.

Brazilian-born Ghosn gained a reputation as an auto industry guru after turning around loss-making Nissan a decade ago, and now jets between France, Japan and the United States.

But he has not escaped criticism, coming under fire for the failure of Renault's ambitious 2009 strategic plan -- which he blamed on the wider crisis -- and in February for what many industry analysts thought was an underwhelming new plan.

Renault's botched spying allegations rekindled memories in France of one the most embarrassing episodes in the history of the Fifth Republic, the 1979 "sniffer plane" scam.

In that case, the Elf oil firm (now part of Total) was swindled out of large sums to develop a plane designed to sniff out oil deposits which turned out to be a hoax.

In 2008, Deutsche Telekom was embarrassed by the disclosure that it had snooped on its staff by illegally monitoring phone call records and had targeted board members and journalists.

But in June, German prosecutors dropped proceedings against the company's former chairman and chief executive.