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Volkswagen scam: CBI names 6 accused

Special Correspondent

Charge sheet does not include name of Minister Botcha Satyanarayana, officials

HYDERABAD: Six persons have been named as accused in the charge-sheet filed by the Central Bureau of Investigation (CBI) here on Saturday in the Rs.11.67-crore scam to defraud the Andhra Pradesh government in the name of car major Volkswagen.

Those figuring in the 150-page charge-sheet filed in a metropolitan court here on Saturday include former Volkswagen executive Helmuth Schuster, the company's India representative Ashok Jain and four others — Jagadeesh Alaga Raja, Gayathri Chandravadanan, Bhuwan Kumar Chaturvedi and Joseph V. George. The last four claimed to be directors of a special purpose vehicle ‘Vashishta Wahan' which was falsely projected as the Indian arm of Volkswagen.

CBI officials said red-corner notices have been issued through Interpol to trace Schuster and Alagar Raja, who are absconding. The remaining four were arrested and released on bail. All of them are charged with criminal conspiracy and cheating. Significantly, the charge sheet did not contain the name of Panchayat Raj Minister Botcha Satyanarayana, who negotiated with Volkswagen on behalf of the State government before the scam broke out in 2005. He was then Major Industries Minister and even visited Volkswagen's headquarters in Germany.

Negotiations

The CBI said the fraud was a sequel to negotiations held by Volkswagen AG Germany with various State governments since 2002 to set up a car manufacturing plant in India. On January 7, 2005, the AP government received a letter from the India project of the company that the firm had decided to establish its unit in Visakhapatnam.

On the letterhead of Volkswagen AG Germany, Schuster and Ashok Jain asked the government to participate in the equity of SPV ‘Vashishta Wahan' to an extent of five million euros. As initial deposit, however, the government represented by AP Industrial Infrastructure Corporation (APIIC) transferred two million euros (Rs. 11.67 crore) to the account of Vashishta Wahan in HSBC Bank. The money was subsequently withdrawn by Schuster and Ashok Jain who paid from the proceeds Rs. 5 crore to Gayathri Chandravadanan and Joseph George for purchase of land.

Schuster resigned from the company in May 2005, raising suspicion of the government which contacted the company headquarters only to be told that it had never given any commitment to set up the plant at Visakhapatnam nor had it received two million euros. The company withdrew the services of Ashok Jain.

The development triggered an intense political backlash in the State, forcing then Chief Minister Y.S. Rajasekhara Reddy to order a CBI probe.

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