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Renault Shares Drop After News of Raid on Headquarters Surfaces, Company Is Innocent

Renault has suffered the worst drop of its share value in 17 years because of a suspicion of emissions fraud. However, the company was apparently clean.
Renault logo 1 photo
Photo: Renault
The situation was caused by a raid conducted by the French Economy Ministry on Renault’s sites and offices, Bloomberg revealed. The Fraud Office of the Economy Ministry wanted to inspect standards testing and engine certification.

Following an Agence France-Presse report on Thursday, an official with the CGT union in France has confirmed the operation. Unfortunately for Renault, the news left the impression that the inspection was related to the Volkswagen emissions scandal known as Dieselgate, which caused a drop in Renault shares.

A Yahoo News report quoting Agence France-Presse (AFP) reveals that the company has admitted to an anti-fraud raid, but no cheating devices have been found in the tests done on its diesel engines. Several Renault production facilities in France have been checked by investigators, and several personal computers belonging to Renault managers were taken for further examination, CGT union revealed to the AFP.

The inspection of Renault sites was done on January 7, according to AFP, but the company’s shares dropped on Thursday, January 14. Renault shares fell 21% to 68,70 euros at 12:30 at the Paris Stock Market. The decline marked a $6.3 billion decrease in market value, equivalent to €5.8 billion. The last decline of this magnitude for Renault happened in 1999 after a situation with the unions, when the company’s shares fell by 23%.

French carmaker Peugeot has also suffered a drop in its share value today on the Paris Stock Market. However, Peugeot’s decline was registered at 7.2% percent, dropping to 13,70 euros a share.

Renault's current situation is not the first of this kind caused by suspicions regarding potential emissions manipulation. Back in September 2015, BMW AG shares suffered a drop of 9.3% after German magazine Auto Bild accused the brand of falsely declaring emissions on specific models. The claims were quickly dismantled, and the magazine retracted its statement, but the stock market damage had been done.
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About the author: Sebastian Toma
Sebastian Toma profile photo

Sebastian's love for cars began at a young age. Little did he know that a career would emerge from this passion (and that it would not, sadly, involve being a professional racecar driver). In over fourteen years, he got behind the wheel of several hundred vehicles and in the offices of the most important car publications in his homeland.
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