Andhra Pradesh 'relieved' VW will return EUR 2m

22nd July 2005, Comments 0 comments

22 July 2005, NEW DELHI - A minister with the southern Indian state of Andhra Pradesh is "relieved" and happy at Volkswagen's decision Friday that EUR 2 million paid by the government to guarantee a factory in the state will be returned.

22 July 2005

NEW DELHI - A minister with the southern Indian state of Andhra Pradesh is "relieved" and happy at Volkswagen's decision Friday that EUR 2 million paid by the government to guarantee a factory in the state will be returned.

Volkswagen's former India representative, Helmut Schuster, has been charged with accepting a payment of EUR 2 million from the government of Andhra Pradesh to guarantee that VW would build a manufacturing plant in the Indian state.

The transaction was deposited to a dummy company under Schuster's control.

A spokesperson for Chief Minister Y S Rajshekhara Reddy told Deutsche Presse-Agentur he was "relieved" that the "money will be returned back".

Though Reddy was waiting for written communication from the German automaker, local media reported that Volkswagen executives informed state government officials of the decision to return the funds over telephone.

Andhra Pradesh's Industries Minister Bosta Satyanarayana is alleged to have a central role in the corruption scandal and was reassigned on June 14 after the scandal broke. However, opposition parties are demanding his dismissal.

Satyanarayana told DPA over the telephone, "I am happy that the people of India and abroad are now apprised of the facts," adding that it was now up to the chief minister to reinstate him in his original post.

"We will maintain our good relations with Volkswagen and we are hopeful that they will set up the plant here soon," said Satyanarayana.

The state government, desperate to get the auto-giant to establish a manufacturing plant in its port city of Vizag, made the payment to what turned out to be a decoy company set up by Schuster's Indian associate, after Volkswagen's representative to India allegedly threatened he would take the project to the south Indian state of Tamil Nadu.

Schuster was sacked by Volkswagen in June.

DPA

Subject: German news

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