UPDATE 3-Renault says technology safe in industrial spy case

* Renault COO says organised overseas network behind case

* Patrick Pelata says economic, cost details may have leaked

* No impact on electric car plans, legal action likely

(Adds lawyer in paragraph 10)

By John Irish

PARIS, Jan 8 (BestGrowthStock) – An international network may have
obtained data about Renault’s electric car programme, but its
vital technology secrets are safe and production of the vehicles
will not be held up, the French carmaker said on Saturday.

Three Renault (RENA.PA: RENA.PA, RENA.PA, RENA.PA) executives, including one member of
its management committee, were suspended on Monday over the
leaking of data, which prompted the government to warn of a
widespread risk to French industry. [ID:nLDE7051GJ]

“This is the work of professionals,” Chief Operating Officer
Patrick Pelata said in an interview with Le Monde newspaper’s
weekend edition. “Renault is the victim of an organised
international network.”

The executives are suspected of leaking information related
to the high-profile electric vehicle programme, a key plank of
the carmaker’s strategy in which it is investing billions of
euros together with Japanese partner Nissan (7201.T: 7201.T, 7201.T, 7201.T).

Pelata said information may have been leaked regarding the
costs and economic model of the programme, but not the “golden
nuggets” of its technology, including some 200 patents that are
being lodged.

“It’s serious, but not as bad as if it had been the
technology,” he said. “Whether it’s the chemistry of the
electrodes, the structure of the batteries, the different
elements of assembling, be it the charger or the engine itself,
we feel ok.”

He added that the electric programme was on schedule: “We
have not lost one day to launch our four electric cars.

Pelata said the three employees would face a preliminary
hearing before facing a likely dismissal. The company was
studying all legal options that would probably lead it to press
criminal charges.

None of the suspended executives has a high profile among
investors or in the media.

Thibault de Montbrial, a lawyer for Matthieu Tenenbaum,
deputy head of Renault’s electric-vehicle programme and one of
the three suspended employees, called the affair “surreal”.

“My client is now portrayed as an international spy when so
far he still doesn’t have any material information explaining
why Renault is accusing him.”

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For a Special Report on Renault-Nissan electric vehicles click on: http://r.reuters.com/hug28q For an ANALYSIS on economic warfare click [ID:nLDE70615S] For FACTBOX on recent espionage scandals [ID:nLDE7061LN] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

CHINESE LINK, THOUSANDS OF CASES

Intelligence services are investigating a possible Chinese
connection, a government source said on Friday. [ID:nLDE7060RP]

Industry Minister Eric Besson played down the Chinese link
on Saturday, saying he could not confirm anything for now.

“Renault will press charges and then the DCRI (internal
intelligence service) will in all likelihood be asked to
investigate,” he told Europe 1 radio. “At that point we will
know a lot more on the backers, beneficiaries, etc.”

Renault is 15 percent owned by the French state.

In 2007, a Chinese student on a work placement at car parts
maker Valeo (VLOF.PA: VLOF.PA, VLOF.PA, VLOF.PA) was given a prison sentence for obtaining
confidential documents. A court stopped short of an industrial
espionage verdict, instead finding she had “abused trust”.

Relations between France and China hit a low two years ago
when French President Nicolas Sarkozy criticised Beijing’s
policy on Tibet.

A visit by Chinese President Hu Jintao to Paris late last
year helped improve ties. France wants Chinese support for
reform of the global monetary system under its presidency of the
Group of 20 club of economic powers.

A government official dealing with corporate espionage,
Olivier Buquen, told weekend paper Le Journal du Dimanche that
there were thousands of industrial spying cases in France in the
recent years as firms and countries seek technological edges.

“The number of incidents on French territory — and these
are reviewed over five years — is alarming,” Buquen said. “It
amounts to several thousand,” he said.

“All sectors, all regions and businesses of all sizes are
affected,” Buquen said. “The number of countries whose nationals
are engaged in corporate espionage is also increasing.”

Buquen said a draft bill was in the works to strengthen the
legal protection of trade secrets.

Christian Harbulot, head of France’s School of Economic
Warfare which trains students in corporate intelligence, said
the difficulties encountered by car producers during the
financial crisis, coupled with the shift to electric technology,
had made the sector even more competitive.

“There is huge tension in the strategies undertaken by the
groups, and competitors are trying to find out what the others
have decided to do.”

(Additional reporting by Patrick Vignal and Gilles
Guillaume; Editing by Peter Graff)