In addition to the ongoing enquiry into fraud, the ex-head of personnel at Skoda, Helmuth Schuster, potentially faces another criminal case here in India.
Go deeper with GlobalData
As the head of the India Project at Volkswagen, Schuster is alleged to have swindled the state government of Andhra Pradesh out of €2 million (INR110 million).
The Andhra Pradesh Industrial Infrastructure Corporation (APIIC) had deposited the sum in an HSBC Bank account in the name of Vasishta Wahan, supposedly a special purpose vehicle (SPV) of VW but this money, meant for VW’s passenger car joint venture in the state, is missing.
The state chief minister YS Rajasekhara Reddy has approached the Indian government to ask for a Central Bureau of Investigation (CBI) probe into the matter which requires clearance from the union home ministry after a case has been lodged against Schuster.
“The money deposited by the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) is no [longer] in the HSBC account of Vasishta Wahan. That is the reason we wanted to go into the details and also help German authorities in their ongoing investigation,” the chief minister said.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThe minister defended the government’s decision to invest the €2 million in Vasistha Wahan, suggesting that Schuster was “pressurising’ the deposit of the sum as part payment for the equity stake in the SPV.
Some industry sources feel the payment was made in spite of the questionable nature of the VW SPV which was ‘benami’ (registered under false names or pseudonyms) in nature.
“The government has not done anything in a gullible or a naive way in paying money towards nominal equity [in] Vasishta Wahan. We acted only on the advice of the then VW India Project head Helmuth Schuster,” the minister said.
‘We have no fear for our money being lost. Volkswagen is totally responsible for the acts of Helmut Schuster, who introduced Vasishta Wahan as the German company’s nominee for the proposed project in Andhra Pradesh,” Reddy added.
The chief minister spoke about recent correspondence from VW’s Alfred Stroehlein to the state industry commissioner, which mentions Jagadeesh Raja, co-promoter of Vasishta Wahan, who was supposed to meet the authorities to sort out the issue.
The seven page press statement by the minister referred to all important events and correspondence with VW regarding the car joint venture since 2002.
Schuster, he said, was not the only person involved in the negotiations and any act by him in his capacity as head of VW’s India project before 22 June 2005 would ipso facto be an act by VW as ‘principals’.
Andhra Pradesh’s desperation in bringing VW investment to the state made it take the reckless decision without checking the authenticity of the Vashistha SPV.
Deepesh Rathore / Tilak Swarup
