Volkswagen's journey into India took another twist today. This is after Jagdeesh Raja, who was to hold 46.5 per cent equity in the India venture of the German carmaker, filing a criminal complaint against Helmuth Schuster, former director of Volkswagen's India operations, and other executives of the company, alleging fraud.
The complaint has been filed with the Delhi Police on Raja's behalf by Mannil Govindan, general manager with Vashishta Wahan Pvt Ltd, under whose banner Volkswagen was making the foray into India, through law firm Titus & Co.
It says the accused -- Schuster, two other Volkswagen executives, Erik Boesler and Jesko Beck, and liaison man Ashok Jain -- cheated Raja of about 771,900 euros (about Rs 4.09 crore (Rs 40.9 million)).
"This money was fraudulently extracted on the false representation that it was for promoting the Volkswagen India project while the same was dishonestly converted to their own use by the accused persons in furtherance of their criminal conspiracy," says the petition.
Schuster had resigned in June this year amid rumours that he took bribes from potential suppliers and set up companies to secure foreign contracts for Volkswagen.
The Central Bureau of Investigation is probing the allegations. Volkswagen, meanwhile, has put its plans on hold. The plant was to come up in Andhra Pradesh. Botch Satyanarayana, who had played a key role in the talks with Volkswagen as the state industry minister, has been moved from his post.
Raja, a venture capitalist based in Dubai, was to hold 46.5 per cent equity in Vashishta Wahan through his company Celestial Overseas Ventures Ltd. Volkswagen was to hold 51 per cent and the Andhra government a nominal 2.5 per cent for 5 million euros.
The state government, through AP Industrial Infrastructure Corporation Ltd, deposited 2 million euros (Rs 11.66 crore) on January 13 this year as its initial contribution.
According to the petition, Schuster, Erik Boesler (a Volkswagen executive) and Jain decided to shift the entire amount to their own account immediately. Schuster directed Raja to remit the entire amount to one EE Trading in Dubai.
The petition says Schuster threatened "dire consequences" and a termination of Volkswagen's association if the money was not transferred. Finally, Raja remitted 656,100 euros. Even after this, says the petition, Schuster kept pressuring Raja to give more money.
