PARIS -- Renault SA said it wrongfully dismissed three executives accused of spying after French prosecutors found no substance in a complaint by the carmaker against the former employees.
CEO Carlos Ghosn and COO Patrick Pelata plan to meet with the executives, promising compensation for "serious prejudice" to their reputations and careers, Renault said in an e-mailed statement today.
Ghosn also "refused to accept the resignation tendered by Patrick Pelata," the company said in the e-mailed statement after an emergency board meeting. As the case unraveled in recent weeks, Pelata had 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."
In a later development today, Renault said it plans to reinstate the three executives and that Ghosn and Pelata will give up their 2010 bonus and stocks options.
Authorities in Switzerland and Liechtenstein have confirmed that the men didn't have bank accounts in those countries, as Renault had claimed, for their alleged spying activities, Paris Chief Prosecutor Jean-Claude Marin said today at a press conference. The probe will now shift to looking into possible fraud by another Renault employee, he said.
Renault held an emergency board meeting today to weigh sanctions against managers involved in the case, two people familiar with the matter said. Prosecutors yesterday issued "organized fraud" charges against Dominique Gevrey, the security chief whose internal investigation led to the firing of upstream development chief Michel Balthazard and two other executives.
"At this stage we do not know whether we are dealing with just fraud or a deliberate attempt to destabilize Renault," Marin said. "If there was any espionage it was not carried out through the networks identified by Renault."
As the case unraveled, Pelata 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.
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 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 seen as crucial
Ghosn is seen as crucial to the Renault-Nissan alliance, however: "Ghosn is today the only real cement holding the alliance together," said the analyst.
"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 rekindkled 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.