Renault Board Cleans House Over Alleged Corporate-Espionage Debacle

PARIS – Officially reacting to the false affaire of spying, Renault’s board of directors cleaned house Monday, hoping to turn employees’ thoughts to the future and not the sordid past three months.

Six high-ranking employees have been dismissed and Chief Operating Officer Patrick Pelata has resigned, although he will continue to work for the Renault Nissan Alliance. While losing several members of his handpicked leadership team, CEO Carlos Ghosn keeps his job.

The three men who ran Renault’s security division, Remi Pagnie, Marc Tixador and Dominique Gevrey, will lose their jobs. Ghosn picked Pagnie to run security personally, having met him when Ghosn ran Nissan for Renault.

Gevrey was arrested March 14 for allegedly defrauding Renault into believing that three managers were taking money from a Chinese company to sell secrets about the auto maker’s electric-vehicle program.

Renault fired the three executives – Michel Balthazard, Matthieu Tenenbaum and Bertrand Rochette – based on two anonymous accusations and without any proof.

One of the anonymous accusers may have been made up by Gevrey. In any case, it was Gevrey’s unnamed source who invented the accused three’s Swiss bank accounts and money transfers.

The accounts did not exist, and the fired executives had no idea what Renault was talking about when they were fired Jan. 3. If it had not been for a leak to the media, the three may have quietly disappeared.

But because the press learned of the firings, Renault was obliged to bring in the French police, and questions were raised about the case in public, spreading doubt about Renault’s decision: Why would a foreign company bribe three people for information, when one would do? Why could Renault offer no proof of the alleged activities?

Former COO Patrick Pelata to remain with alliance.

Another Renault executive, Philippe Clogenson, was fired in 2009 under similar circumstances, accused anonymously of taking payments. He was given a severance package, but did not understand what was happening to him. When the French police examined this year’s case, they also found records of the Clogenson affaire.

Renault’s board of directors has reinstated Clogenson as a business-development director, and they will pay somewhere between E5 million and E10 million ($7 million-$14 million) to the three fired executives. The youngest, Matthieu Tenenbaum, will rejoin Renault.

The money will come in part from bonuses and stock options given up by Ghosn, Pelata and other executives involved in the matter.

Besides the three men in charge of security, Renault also is dismissing the human resource executive in charge of executives, Jean-Yves Coudriou; legal director Christian Hussain; and the Secretary General Laurence Dors.

These men are losing their jobs because they did not provide proper oversight, according to the board of directors.

Pelata, who was Ghosn’s right-hand man at Nissan and would have been his heir apparent if he was not the same age, asked to be relieved of his duties as COO, and the board accepted it this time. Ghosn refused his resignation last month.

In any case, Ghosn says Pelata is valuable and will continue to work for the alliance partners. He also will continue as COO until a successor is named.

The Renault board committee that audited the events of the alleged espionage scandal says the company now should move on.

“The people that played a principal role in the affaire and/or those involved in solidifying the opinion that this was a case of corruption must not continue in their functions,” the committee says in a statement. “The two audit reports don’t lead us to believe that the CEO (Ghosn) belongs in this category.”

One of Renault’s more radical unions, the CGT, says it is surprised Ghosn is being given a free pass, but the CFE-CGS union released a statement saying “all the consequences of the mistakes” have been resolved.

The board also is calling for a new management organization, and outside experts have been asked to design a new security operation. The auto maker will have an ethics committee as well as a risk committee, and the two will work together on any future problems.