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Renault: Security Agent Invented Industrial Espionage Claims

Tue, 03/15/2011 - 4:43am
Pierre-Antoine Souchard, Associated Press

PARIS (AP) — A security agent for Renault has been charged with fraud and accused of inventing industrial espionage claims that led the French carmaker to wrongly suspect — and suspend — three executives, the state prosecutor said Monday.

The cloak-and-dagger affair, in the public eye since January, was deeply embarrassing for France's second biggest carmaker, which announced that all executives involved, including president Carlos Ghosn and chief operating officer Patrick Pelata, would forego all stock option benefits for 2011 and the "variable portion" of their 2010 earnings.

At an extraordinary board meeting late Monday, Ghosn also refused Pelata's tendered resignation, a company statement said.

Renault executives Michel Balthazard, Bertrand Rochette and Matthieu Tenenbaum were suspended Jan. 11 after the company said it had discovered signs of espionage, had proof the men received "funds from a foreign source" and accused them of selling "information strategic for the company."

The executives had strongly denied the allegations and investigators could not verify them. Renault's focus then shifted to a possible scam.

Preliminary charges of "organized fraud" were filed Sunday against Dominique Gevrey, once employed by the Defense Ministry intelligence service and now a member of Renault's security service, prosecutor Jean-Claude Marin told reporters Monday.

Gevrey had been detained Friday at Paris' Charles de Gaulle airport as he prepared to board a flight for Guinea, and has since been jailed.

"Renault is perhaps not a victim of indelicate employees but of fraud," Marin told reporters.

He said foreign accounts that were alleged to have been held by the three executives, notably in Switzerland and Liechtenstein, do not exist.

Renault quickly sent a deep apology to the wrongly accused employees and said after the board meeting that the carmaker would propose returning them to their jobs or providing an indemnity.

The company also said its sector concerning protection of the group, information and personnel will be fully revised.

Ghosn, and Pelata "acknowledge the serious personal harm that they (the employees) and their families have suffered," an initial company statement said, adding that "reparations (will) be made" and "their honor in the public eye (will) be restored."

Investigators in the French intelligence service found a series of clues the prosecutor contends pointed to Gevrey — the only person in contact with an alleged source who furnished bank information implicating the three executives. That information turned out to be false.

Banking information Gevrey furnished in the 2009 firing of an executive in an unrelated case also was false, Marin said.

"Everything he provided is false or inexistent," Marin said.

Gevrey's lawyer, Jean-Paul Baduel, insisted that his client is innocent, saying in an interview that he is "nothing but a little soldier." He denounced what he said was Renault's "paranoia."

Renault had launched an internal investigation into allegations the three executives had "deliberately and consciously threatened" company assets, after receiving an anonymous letter more than four months earlier denouncing the men. The allegations centered on Renault's electric car program, in which Renault and partner Nissan Motor Co. had invested $4 billion.

The scandal, which Renault made public in January, led French Industry Minister Eric Besson to openly talk of "economic warfare" being waged on one of France's leading industrial giants.

Renault filed a criminal complaint on Jan. 13 "against persons unknown" — for acts constituting organized industrial espionage, corruption, breach of trust, theft and concealment — after the carmaker said it had discovered "serious misconduct detrimental to the company" and in particular to its "strategic, technological and intellectual assets."

The company's chief operating officer, in an interview at the time with French newspaper Le Monde, had accused an "organized, international network" of obtaining information on its flagship electric car program, including its architecture, costs and economic model. Sensitive, proprietary technological information on Renault's electric cars had not been compromised by the espionage, Pelata said in January.

Renault's Ghosn said on the French TV channel TF1 on Jan. 23 that "we have the certitude" and "multiple" proofs of the alleged espionage, although Renault never disclosed any evidence to back up its complaint, saying such information was reserved for investigators.

But by early March, doubt was growing, and Pelata spoke of a possible "manipulation." The course of the investigation changed dramatically Friday, with Gevrey's arrest.

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