PARIS – Renault will face consequences over a case of suspected industrial espionage in which the carmaker has said it may have been tricked, French Finance Minister Christine Lagarde said on Friday.
Renault admitted for the first time in an interview in Le Figaro’s Friday edition that it had reasons to doubt it had been a victim of industrial espionage.
The carmaker had fired three executives and lodged a legal complaint in January over suspicions of spying targeting its high-profile electric vehicle programme, amid fears that information had been passed to a foreign power.
“What counts today is getting to the truth and getting there quickly, and if the suspicions were unfounded that justice be done, confidence restored and compensation paid,” Lagarde said in an interview on RMC radio.
The minister added that “all the consequences” would have to be faced in terms of responsibility for the affair.
The case has strained relations between Renault — which is 15 per cent state-owned — and the government, as the carmaker came under fire for not informing authorities of its suspicions soon enough and carrying out its own investigation first.
The affair had also threatened to spark a diplomatic spat 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.
“One shouldn’t shoot without a sight or accuse without proof,” Ms Lagarde told RMC.
Renault’s lawyer, Jean Reinhart, said on Thursday that French intelligence services were still probing the existence of bank accounts in Switzerland and Liechtenstein as part of the inquiry and dismissed reports the carmaker had been tricked.
The existence of the possible accounts is a key part of the case against the three fired executives.
But Renault chief operating officer Patrick Pelata told Le Figaro “a certain number of elements lead us to doubt”, adding that the company had arrived at two hypotheses.
“Either we are confronted with a case of espionage and a senior security executive is protecting his source despite everything,” he said. “Or Renault is the victim of a manipulation, which we don’t know the nature of but which could be a fraud.”
Mr Pelata said he would propose reinstating the three executives — all of whom have said they have done nothing wrong and are suing Renault — and making good any injustice if “all the doubts are lifted”.
“When the inquiry is finished, we will accept all the consequences up to the highest level of the company, that is to say up to myself,” Mr Pelata said, adding that in either case the company was a “victim”.
March 4 – France faced the potential of severe political embarrassment on Friday after carmaker Renault RENA.PA threw doubt on the spying accusations that shook the company to its core and threatened a diplomatic spat with China. [ID:nLDE7230I7]
Here is what has happened so far in the espionage scandal which broke at the start of the year:
August 2010 – Renault’s compliance committee receives an anonymous “ethical alert” triggering an internal investigation.
October 2010 – Renault unveils the near street-ready version of its Zoe electric car, due for launch in 2012. Partner Nissan Motor Co 7201.T shows off its Leaf electric car which it will begin selling in multiple markets a few weeks later.
— Renault prepares to launch the Fluence and Kangoo electric vehicles and the Twizy two-seater electric city car.
Jan. 3, 2011 – Renault suspends three executives, including one member of its management committee. It later emerges that the three are Michel Balthazard, senior vice-president of advance engineering, his number two Bertrand Rochette and Matthieu Tenenbaum, deputy head of the electric vehicle programme.
The company says it plans legal action over alleged leaks of data, prompting a French official to warn of “economic war” and risks to French industry.
Jan. 4 – French Industry Minister Eric Besson visits the Renault Technocentre near Paris, the hub of the company’s electric vehicle programme.
Jan. 7 – French intelligence service the DCRI is looking into the case and a possible Chinese connection, a government source says.
Jan. 8 – Renault says an international network may have obtained data about the costs and economic model of its electric car programme but vital technology secrets — including 200 patents that are being lodged — are safe.
Jan. 11 – Speaking to journalists outside Renault’s headquarters following a meeting with management, Balthazard denies any wrongdoing.
— Tenenbaum’s lawyer says his client was accused on the basis of an anonymous letter which said he had received bribes.
— Rochette later tells RTL radio he is “amazed” at the accusations and had nothing to do with leaking information in return for bribes, as Renault alleged.
— China denies any link to industrial espionage, dismissing reports of its possible involvement as “baseless”.
Jan. 12 – France plays down the possibility of a link to China, saying it is not accusing any one country.
Jan. 13 – Renault sets the scene for a lengthy judicial process by lodging a complaint against “persons unknown” on counts of organised theft, aggravated breach of trust and passing intelligence to a foreign power, Paris prosecutor Jean-Claude Marin says.
— Renault says it has discovered serious misconduct detrimental to its “strategic, technological and intellectual assets”.
Jan. 14 – French state prosecutors launch an inquiry into industrial espionage at Renault.
— France’s DCRI has been charged with the investigation.
Jan. 19 – The three executives, now fired by Renault, say they plan to take legal action against the French carmaker.
Jan. 23 – Chief executive Carlos Ghosn says the suspected espionage appears to have been aimed at uncovering Renault’s investment model for its electric vehicles but declines to provide specifics of what proof Renault has of the espionage.
March 3 – Renault’s lawyer Jean Reinhart tells Europe 1 radio that the authorities were still investigating foreign bank accounts and dismisses media reports that the company had been tricked into believing it had been a victim of industrial espionage.
March 3 – Chief Operating Officer Patrick Pelata later tells newspaper Le Figaro in an interview that the company has some reasons for thinking it may have been tricked.
March 4 – Renault will “face consequences” after saying it might have been tricked into launching the investigation, says French Finance Minister Christine Lagarde. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For related Special Reports see:
http://link.reuters.com/pyc77r
http://r.reuters.com/gej38r ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ (Compiled by David Cutler, London Editorial Reference unit in London and Helen Massy-Beresford in Paris; Editing by Greg Mahlich)
One of the more common predictions for 2011 among industry-watchers is that smartphone malware will become more common as smartphones grow more popular. But even feature phones are vulnerable to attacks.
Collin Mulliner and Nico Golde – students in the Security in Telecommunications department at the Technische Universitaet Berlin – have demonstrated a so-called “SMS Of Death” attack on feature phones made by LG, Motorola, India-based Micromax Nokia, Samsung and Sony Ericsson that exploits the ability of the SMS protocol to send “binaries” (small programs) to the handset.
Cellcos use this function to remotely change phone settings, but attackers can use it to send malicious messages that can shut down the phones. While the attack requires the attacker to know the type phone someone is using, they can easily send five malicious SMSs targeting the top five handset models in that market and knock large numbers of users off the network, according to Technology Review.
The availability of Web-based bulk SMS services make this kind of attack both cheap and easy, Mulliner says.
Cellcos have two options to prevent such an attack, according to the TR report: update the firmware of existing phones, or filter SMS traffic for malware, the latter of which is tough because SMS filters are designed to block spam, not binaries.
French car maker Renault has launched legal action for industrial espionage after it suspended three top managers who it reportedly suspected of leaking secrets about its new electric cars.
The company said it had lodged a complaint for “industrial espionage, corruption, breach of trust, theft and handling stolen goods”.
State prosecutor Jean-Claude Marin said the charges alleged that “elements concerning France’s economic secrets” had been leaked “to a foreign power”.
The French daily Le Figaro has reported that Chinese interests stood to benefit from spying on Renault’s electric car programme, on which it is staking its future. China has angrily denied any involvement.
Renault last week suspended three senior managers – Michel Balthazard, Matthieu Tenenbaum and Bertrand Rochette – over suspicions they had leaked strategic information.
The three deny involvement and were not named in the company’s judicial complaint last Thursday. Under the French judicial system prosecutors can investigate allegations without a defendant being named.
WASHINGTON—China stealthily integrated itself into America’s telecommunications market over the past several years and is taking advantage of the United States’ superior name brand to further its goals, alleges a U.S. China Economic and Security Review Commission (USCC) report this month.
China is “able to affiliate their products with the excellent reputation of U.S. brands in global markets. China’s technology industry now appears to be a de facto part of the American communications industry landscape,” states the USCC report in its introduction.
A major issue is that China aggressively bulldozes its way into every conceivable market, most importantly the technology sector, crushing its competitors with cheaper subsidized products (often filching the technology from foreign companies doing business in China), forced technology transfer, cyber attacks, corporate spying, or acquisition of foreign companies.
The Commission sent out a warning signal stating, “Investments would increase China’s leverage in the U.S. marketplace and beyond (even if indirectly through joint ventures and third parties) and could eventually provide China access to or control of vital U.S. and allied information, networks, or segments of critical supply chains.”
Espionage in High Gear
“Lurking in the cybershadows is a far more insidious and sophisticated form of computer espionage. … Such attackers represent the elite—a dark army of cyberspies targeting the heart of corporations around the world where trade secrets, proprietary data, and cutting-edge technologies lie locked away in digital fortresses,” according to an investigation on Chinese cyber attacks by The Christian Science Monitor (CSMonitor) last year.
Experts suggest that one tool of the espionage trade is cyber espionage, a highly effective tool that has been employed a number of times and was more often than not found to originate in China.
“The China threat is constant. If there’s valuable intellectual property out there, there are people in China and elsewhere who want to take it. It’s the new battlefield—low risk and low investment with high gain,” said Shawn Carpenter, forensics analyst for cybersecurity company NetWitness, in the CSMonitor article.
In 2010, Canadian cyber attack experts discovered spyware nicknamed “GhostNet.” The spyware was found to originate from Hainan Island Internet accounts, where the Chinese army intelligence is located.
The USCC report also sees China as the main culprit in stealing trade secrets via cyber attacks. “There is growing public concern over the impacts of cyber espionage incidents that appear to originate in China.”
Congressional and industrial sources said that computer attacks on companies, including Google, Yahoo, and defense contractor Northrop Grumman have increased, although these companies, outside of Google, have remained quiet about it.
“Online attacks that appear to come from China have been an ongoing problem for years, but big companies haven’t said much about this, eager to remain in the good graces of [China],” according to an article on Computerworld’s website.
According to expert opinion, these companies downplay incidents for fear of losing access to the so-called lucrative Chinese market.
