Fears Renault used loan to develop test cheat
THE EUROPEAN Investment Bank (EIB) has asked French investigators to find out whether €800 million (R10bn) of Eu-backed loans to Renault could have been used to develop test-cheating diesel engines, according to documents seen by Reuters.
The EU lending arm wrote to judges leading a fraud probe into preliminary findings that Renault diesel engines – like VWS – had been configured to manipulate nitrogen oxide (NOX) emissions tests.
Renault, which has consistently denied breaking any laws or emissions rules, had no immediate comment on Friday. The Paris prosecutor’s office did not respond to requests for comment.
Since 2009, the EIB has granted more than €8bn in preferential loans to back development of vehicles with lower carbon dioxide (CO²) emissions by car makers including VW, exposed in 2015 for using software “defeat devices” to dupe US regulatory tests.
Technologies funded by the EIB have included diesel engines, because they emit less CO² than fuel equivalents. More recently, however, diesels have been shown to produce many times the legal limit of toxic NOX in real driving.
“The EIB has granted Renault several loans to finance projects including research and development to reduce vehicle CO² emissions,” the bank’s chief fraud investigator told the French judges.
The January 30 letter also proposes a follow-up meeting “in order to establish whether our financing is implicated in your investigations and to offer you all possible assistance”.
It adds: “The EIB enforces a zero-tolerance policy towards fraud and corruption and strives to ensure that no illegal activity tarnishes its business.”
A spokesperson for the bank declined to comment on the contact with French prosecutors. Two €400m loans granted to Renault in 2009 and 2013 had since been reimbursed, she said, and a third outstanding €180m facility did not cover any diesel development.
The EIB has faced scrutiny over its funding to car makers in light of the ‘dieselgate’ scandal and later probes.
Renault shares fell 7.8 percent in three days to end last week at €78.65 after excerpts of a November report by France’s DGCCRF consumer fraud watchdog appeared in newspapers, wiping €2bn off the company’s value. The stock has since recovered to €80.68.
Based on the agency’s findings, prosecutors opened an investigation in January into fraud allegations against Renault and its chief executive, Carlos Ghosn. If found guilty, the group could be fined up to 10 percent of annual revenue, or €3.58bn.
The DGCCRF report cites engine software parameters from Renault’s own technical documentation that partially or entirely deactivate anti-pollution functions.
Renault has argued in press briefings that the limits on emissions control were necessary to protect its engines while maintaining driving performance and fuel efficiency, and therefore allowed under current EU rules.
The car maker has nonetheless recalled almost 11 500 cars to tweak engine calibrations and reduce NOX emissions.
Changes will include extending the narrow range of air intake temperatures within which the EGR is programmed to work. In France’s climate, the calibration renders the anti-pollution device virtually useless for seven months of the year, Renault itself concedes in company documents.
The EIB, the world’s biggest multilateral lender with almost €80bn granted each year, has faced scrutiny over its funding to car makers in light of the “dieselgate” scandal and subsequent investigations in France and other countries.
VW, which has set aside €22.6bn to cover its US criminal settlement and other costs, was awarded €400m by the bank in 2009 to develop “green technologies”.
The German car maker’s use of EIB funds has been “very thoroughly” investigated, bank president Werner Hoyer was quoted as saying at a January news conference.
“We have not found any indication that our loans might have been used for fraudulent purposes.”