Renault SA called an emergency board meeting today that may lead to sanctions against executives involved in a mishandled espionage case, two people familiar with the matter said.
Renault is under pressure to replace managers after prosecutors pressed fraud charges against the security chief whose internal investigation led to the firing of three senior executives. Chief Operating Officer Patrick Pelata said March 4 that managers would be held accountable “all the way up to me” if the three were cleared.
Dominique Gevrey, a Renault security official, was charged yesterday with “organized fraud” over his role in the firing of upstream development chief Michel Balthazard and two other executives.
“We’ve said from the start that our client is a victim of slander,” Balthazard’s lawyer Pierre-Olivier Sur said by telephone. “Renault has posed as a victim, first of espionage and now of fraud, but the only victims here are our client and his co-accused.”
Foreign Accounts
Renault dismissed Balthazard, his subordinate Bertrand Rochette and deputy electric-car program chief Matthieu Tenenbaum in January after its investigation concluded they had received payments from Chinese companies via foreign accounts.
The case against them was based on verbal information obtained by Gevrey from an undisclosed source, for which Renault paid 250,000 euros ($348,400), company attorney Jean Reinhart said last week.
Renault’s meeting comes as another fired Renault executive emerged as a fourth potential victim of the alleged fraud.
Former marketing manager Philippe Clogenson, dismissed by the carmaker in 2009 after being accused of taking bribes through overseas accounts, is signing up to Gevrey’s prosecution as a victim, his lawyer Eric Moutet said in an interview today. The move opens the way for a possible damages award if the case leads to a conviction.
‘Whole Truth’
“Renault wants the whole truth to come out and will repair any injustice that has been done,” company spokeswoman Frederique Le Greves said after prosecutors opened their fraud investigation yesterday. She declined to comment on whether Pelata would tender his resignation or whether Ghosn would accept it.
Pelata, 55, graduated from France’s elite Ecole Polytechnique in the same 1974 class as Ghosn, before joining Renault as head of bodywork assembly at the carmaker’s plant in Flins, west of Paris.
In 1999, when Ghosn was sent by then CEO Louis Schweitzer to rescue Japanese affiliate Nissan Motor Co. from near- bankruptcy, he took Pelata with him and the two have worked closely together ever since. Pelata took over day-to-day control from Ghosn in 2008.
If Pelata did resign, Renault might find itself without an operating manager and no obvious successor, said Philippe Houchois, a London-based analyst with UBS.
‘Hold His Own’
The carmaker " hasn’t done a very good job of managing succession, and Pelata is one of the few people who can hold his own against Ghosn when necessary,” he said.
Ghosn has also come under pressure over the mishandling of the affair. Defending the carmaker’s espionage claims in January, the CEO said he had personally overseen the internal probe and its “multiple” findings against the three executives. “If there were no certainties about this, we wouldn’t be where we are now,” he said on TF1 television.
“If it emerges that the three employees didn’t betray their company, the CEO must take responsibility and apologize publicly, or tender his resignation,” Marc Laffineur, deputy leader of the governing UMP party in the National Assembly, said after the carmaker backed away from its earlier allegations.
Other executives who may face sanctions for their involvement in the espionage investigation include Odile Desforges, director of engineering and quality, Laurence Dors, the company’s general secretary, human resources manager Jean- Yves Coudriou and Legal Director Christian Husson.
‘Credibility’ Blow
Renault employees expect sanctions against “those responsible for these mess-ups,” the carmaker’s CFDT union said in an open letter addressed to Ghosn.
The affair has “dealt a blow to the credibility of Ghosn and Pelata, who were both directly involved,” Fabien Gache, a spokesman for Renault’s main CGT union, said March 4.
Balthazard, Rochette and Tenenbaum have repeatedly denied any wrongdoing and filed criminal defamation claims.
Tenenbaum “is waiting to hear what Renault has to propose” and doesn’t rule out returning to work, his lawyer Thibault de Montbrial said. “First of all we’re waiting for an official declaration of his innocence, since the prejudice he has suffered increases with every day that passes.”
Paris Chief Prosecutor Jean-Claude Marin will hold a press conference about the case at 2:45 p.m., his office said today.
Renault had last week publicly ordered Gevrey to reveal the source of the banking information after police found no trace of the three alleged accounts in Switzerland and Liechtenstein, where legal authorities cooperated with the probe. His colleague Marc Tixador and Security Director Remi Pagnie were also questioned over the weekend and released without charge.
Gevrey, a former French intelligence agent, was arrested March 11 at Paris Charles de Gaulle airport as he prepared to board a flight to an African country, said a court official, who declined to be identified in accordance with policy.
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