PARIS: Shares in Renault suffered a meltdown on the Paris stock exchange today after anti-fraud detectives raided sites of the carmaker in an apparent emissions probe.
Union leaders, who first reported the raids, said the searches may be linked to suspicions of emissions foul play, raising fears that an ongoing Volkswagen pollution scandal was spreading to neighbouring France.
But Renault, while confirming there had been searches, said that no cheating devices had been found in diesel engine tests which had earlier been commissioned by Environment Minister Segolene Royal. "The news triggered a massive selling movement, it's a disaster that's pulling everybody down," said one Paris-based analyst, referring to plunging auto stocks across Europe.
At around 1500 GMT, Renault shares were trading nine percent lower at 78.86 euros, having earlier slumped as low as 67 euros, a drop of over 20 percent -- at that point wiping over 4 billion euros (USD 4.4 billion) off the company's value "which is colossal", the analyst said.
Early today, unions reported that French anti-fraud detectives had last week raided several production sites ofRenault, possibly to search for any indication of software meant to help cars cheat when undergoing tests for pollution emissions, as Volkswagen has admitting 11 million diesel vehicles.
"Agents from the (anti-fraud unit) DGCCRF intervened in various Renault sites last Thursday," the CGT Renault union said in a tract.
The probe targeted the sites' engine control units which suggests, the union said, that the raids "are linked to the consequences of the Volkswagen rigged-engines affair".
Detectives took several personal computers belonging to Renault managers, the unions said.
But Renault played down the raids, saying they were part of a probe by the DGCCRF aimed "to confirm definitively the initial analysis conducted" at the behest of Royal and which had "not shown evidence of illegal cheating software on Renault vehicles."
At the time of the stock exchange debacle, the Royal commission was presenting its conclusions after tests on 100 car models to the minister.
French rival Peugeot, France's biggest car maker whose shares also plunged, quickly released a statement saying it had not been the target of any anti-fraud raids, adding that similar government tests had resulted in the "absence of any anomaly" in car emissions.
Peugeot shares subsequently came off their lows, trading 3.3 percent down at 14.26 euros, off an earlier 13.33 low. The Renault news weighed on auto stocks across Europe, with BMW, Daimler and Volkswagen all falling more than five percent at one point.
Volkswagen is facing possible fines that could reach into the tens of billions of dollars in the United States alone over the scandal, and faces probes in other countries as well.