Indian state to investigate VW money transfer
14 July 2005, NEW DELHI - An investigation has been called into the transfer of EUR 2 million to guarantee the building of a Volkswagen factory by the southern Indian government of Andhra Pradesh, news reports said Thursday.
14 July 2005
NEW DELHI - An investigation has been called into the transfer of EUR 2 million to guarantee the building of a Volkswagen factory by the southern Indian government of Andhra Pradesh, news reports said Thursday.
State chief minister YS Rajashekhar Reddy ordered the investigation under pressure from both the opposition and allies, NDTV reported. In addition, Industries Minister Bosta Satyanarayana will be removed from his post.
How the money was paid to Vashishta Wahan, a dummy company that purported to be an affiliate of Volkswagen and was charged with setting up a factory in Vizag for the German automaker, will be the focus of the probe.
Reddy told reporters that the state government was still committed to having Volkswagen establish its plant in the state. He said the Andhra Pradesh government was in constant touch with the auto-giant and will send a three-member team to Germany to get more details.
After receiving the payment of EUR 2 million from the local government, former Volkswagen India representative Helmut Schuster had the money transferred to his bank accounts in Switzerland, the IANS reported. Schuster was recently sacked by VW on bribery charges.
Schuster had allegedly pressured the state government to pay the money to Vashishta Wahan, a Delhi based firm registered to his Indian associate Ashok Jain.
The VW executive had threatened that he would "take" the project to the southern Indian state of Tamil Nadu if the money was not transferred.
He later forced one of the directors of Vashishta Wahan, Bhuvanesh Chaturvedi to transfer the money to his bank account in Switzerland through the Dubai-based finance company, Celestial, owned by another director of Vashishta Wahan, JA Raja.
News reports also speculated whether Schuster had pocketed a nearly EUR 2 million donation from Volkswagen for tsunami survivors.
The Times of India said the money meant for relief work was never delivered to the state's coffers, though the "state government made a song and dance about it".
The Industries Minister B Satyanarayana, who earlier claimed that "the money is safe", said Volkswagen had so far not communicated to the state government that it had nothing to do with Vashishta Wahan.
The minister's role in the case is getting murkier as an Asian Age report said Satyanaryana's relatives had used inside information on the site of the future Volkswagen factory to reportedly make "a killing buying land cheap and selling it high".
The paper said the land was "sold off after land rates shot up following the minister's announcement that Volkswagen was definitely coming to the port city".
Subject: German news