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January 14, 2016

Renault shares plunge after emissions probe revealed

Renault shares have plunged the most in 17 years after a union said French fraud investigators seized computers from the automaker, apparently as part of a probe into emissions testing.

Renault shares have plunged the most in 17 years after a union said French fraud investigators seized computers from the automaker, apparently as part of a probe into emissions testing.

According to Bloomberg, Renault dropped 21% to EUR68.70 at 12:30 pm Thursday (14 January) in Paris. The intraday decline of 23% was the biggest since 4 January, 1999, wiping out EUR5.8bn (US$6.3bn) in market value. Peugeot fell 7.2% to EUR13.70.

Agents from the economy ministry's fraud office visited some Renault sites that have to do with standards testing and engine certification, Florent Grimaldi, an official with the CGT union in Lardy, France, told Bloomberg on Thursday, confirming a report earlier by Agence France-Presse.

That left the impression that the probe is related to emissions standards in the wake of the Volkswagen scandal, he said.

Renault said it planned to issue a statement soon. The fraud office didn't return a Bloomberg call seeking comment. Investigators visited four different sites near Paris, including Lardy and company headquarters in Boulogne-Billancourt, on 7 January, according to AFP.

French authorities started a probe in September into whether VW deceived customers about the emissions levels of its diesel cars and promised to expand the probe to cover all carmakers, including Renault and PSA Peugeot Citroen, Bloomberg noted.

Separately, the country's environmental regulator began randomly testing vehicles to check differences between emissions results found in laboratory testing and real-world figures.

Peugeot said in October it never used software to turn on emissions controls only while being tested, as Volkswagen admitted to doing, Bloomberg added.

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