French Paper Expects Rolling Heads At Renault As Board Convenes

Renault has scheduled an extraordinary board meeting for today, Monday, French media reports. The meeting will deal with the spy scandal that turned out to be a fraud. On Sunday, France’s Journal Du Dimanche speculated that the heads of COO Patrick Pelata, legal affairs chief Christian Husson, HR chief Jean-Yves Coudriou and security chief Remi Pagnie could be on the block after they were implicated in a letter from jail, written by Dominique Gevrey. The investigator had been hired by Renault, and was subsequently arrested on suspicions of fraud.

A Renault spokeswoman confirmed to Reuters that “we are holding an extraordinary board meeting this afternoon in relation to the affair of the executives. After the board meeting, Renault may communicate.”

The meeting follows a 20 page report filed Friday by Renault director Philippe Lagayette. The dossier “is an unvarnished account of all stages of the crisis”, says the Journal du Dimanche. There also is a report by an outside auditor.

Renault had terminated three executives in January on suspicion of industrial espionage. The executives sued for €11 million, and Renault made a counter-offer for half, if the sources of the Journal du Dimanche are correctly informed.

In the meantime, Renault has apologized to the falsely accused executives and offered reinstatement and compensation. Pelata had tendered his resignation, but Renault CEO Carlos Ghosn rejected it, “in the interests of Renault.” Ghosn, along with Pelata and other executives involved in the case returned 2010 bonuses and receive no stock options this year.

Inflammatory remarks by France’s Industry Minister Eric Besson had strained relations with China. In an interview with TV channel LCI , Besson now blasts “serious dysfunctions within the company’s management.” People responsible for the botched spy probe “must depart,” France’s Finance Minister Christine Lagarde says. Besson was the one who politicized the matter by calling it “economic warfare”, which attracted the ire of China, where Renault and Nissan have a booming joint-venture with Dongfeng. When the espionage backfired, China’s Foreign Ministry took it with good humor and said “it hoped people checked facts before unjustly implicating the country,” Taiwan’s China Post heard.

“Everything was a bit tense,” at Renault over the weekend, says the Journal du Dimanche. “Anything can happen.” We will keep you posted.