Heads must roll after Renault spy scandal

April 11, 2011

, PARIS, Apr 11 – The French government, which owns a 15-percent stake in Renault, said Monday that those responsible for an embarrassing industrial espionage debacle at the car-maker should be sacked.

"If mistakes have been made, those who are responsible must go if the extent of their mistakes justifies it," Finance Minister Christine Lagarde told France Inter radio.

Her comments came as Renault was preparing to hold an extraordinary board meeting later Monday to examine an audit committee\’s report on the scandal that centred on wrongful accusations of spying.

Lagarde said the report showed that the company\’s management style was "dysfunctional" and revealed the need both for a "revision of the governance rules and for sanctions."

Industry Minister Eric Besson added that it was up to Renault to decide if its chief executive Carlos Ghosn stays in his job but that the carmaker\’s management style had to change.

Ghosn will present a reorganization project to the board during Monday\’s meeting, Besson told LCI news channel.

A report Sunday in French newspaper Journal Du Dimanche said Renault\’s chief operating officer Patrick Pelata, legal affairs chief Christian Husson and its human resources and security chiefs may resign after Monday\’s meeting.

Lagarde said she had instructed state representatives on the board to support the recommendations of the audit report.

The French car giant sacked three managers in January, saying publicly it had proof they had been selling secrets on the electric technology which is expected to change the car industry.

The French government branded the affair "economic warfare" and some pointed the finger at China, drawing an angry denial from Beijing.

But in March the firm apologised to the managers after it emerged police found no trace of bank accounts the accused men were alleged to have held and that the source of the spying allegations may have been a fraudster.

Renault and its Japanese partner Nissan have staked their future on electric vehicles and plan to launch several models by 2014 to meet rapidly rising demand for more environmentally friendly methods of transport.

They have invested four billion euros in the programme.

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