HYDERABAD: The Government's refusal to accept the demand draft from Volkswagen AG was apparently to ensure that the German automotive major continued its engagement with Andhra Pradesh in connection with the setting up of the car project.

Chief Minister Y.S. Rajasekhara Reddy refused to accept a demand draft for Rs.11.67 crores from Volkswagen representative, Frank Elbe, citing that the CBI was probing the issue and a large part of the money paid to Vashistha Wahan was already recovered.

Signing of MoU

According to official sources, Mr. Elbe wanted the Government to sign a memorandum of understanding (MoU) after accepting the demand draft. It was refused since such an action would make the automotive major free to set up factory in any other State and it would not be "morally and legally binding" on it to come to Andhra Pradesh.

Mr. Elbe was believed to have told Dr. Reddy that several other States were offering concessions and the company was examining them.

The sources said that the Chief Minister briefed the Cabinet on Tuesday on the discussions he had with Mr. Elbe. Dr. Reddy also reportedly made it clear to Mr. Elbe that the Government was keen that CBI completed its enquiry and the entire amount was recovered. So far Rs. 6 crores was recovered.

Printer friendly page  
Send this article to Friends by E-Mail