Renault board to meet as spy case unravels

Carmaker Renault's board will hold an extraordinary meeting on Monday, a source said, as French authorities prepared to brief media on the now-unravelling industrial spying case that has gripped France.

Renault, which in January fired three executives -- all of whom deny wrongdoing -- and lodged a legal complaint over suspected spying at its electric vehicle programme, has since admitted it may have been tricked in a debacle likely to have serious consequences for senior executives.

The French state prosecutor will address media at 1345 GMT, a day after a Renault security manager was placed under investigation for suspected fraud concerning the spying allegations, which almost sparked a diplomatic row with China.

Separately, Renault, 15% state-owned, will hold an extraordinary board meeting at 1500 GMT, a source close to the carmaker told Reuters, without specifying what the meeting would be about.

"All I can tell you is that a board meeting has been called at the headquarters in Boulogne (Billancourt) at 4 pm (1500 GMT)," the source said.

If the spying accusations prove unfounded there will be consequences for the carmaker's management.

Chief Operating Officer Patrick Pelata has hinted that his own job may be at risk, saying that the company would accept all the consequences "up to the highest level of the company, that is to say up to myself".

"Mr Pelata is not necessarily irreplaceable, but it would still be a significant shock," said one analyst who asked not to be named.

The case also affects Carlos Ghosn, the dynamic CEO of Renault and its partner Nissan Motor, who early on in the affair spoke out, saying the carmaker had "multiple pieces of evidence" for its allegations.

But in February Ghosn told journalists 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.

But the case briefly caused tensions with China when news of the sackings broke in January, after a government source said investigators were following up a possible link with China in initial probes before a formal inquiry was launched.

Renault and the government subsequently played down talk of the possible link and China angrily denied any involvement.

Alliance cement

Ghosn is seen as crucial to the Renault-Nissan alliance.

"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," the analyst said.

"Ghosn is today the only real cement holding the alliance 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 in his two high-profile roles.

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.

Some analysts also see his evangelical belief in the potential of electric vehicles -- he thinks 10% of the new vehicle market by 2020 will be electric, and Renault and Nissan are jointly investing 4 billion euros in EVs -- as misguided.

Renault shares were down 4.9% at 38.78 euros by 1315 GMT on Monday, reflecting concerns about the impact of the earthquake and tsunami in Japan on Nissan, although a Renault spokesman said there was no impact on its own production.

"With their cross-shareholdings, what affects Nissan affects Renault, and with Nissan's plunge it's normal that Renault's stock takes a hit," a Paris-based trader said.