Andhra Volkswagen hopes punctured

The Andhra Pradesh Government’s dream of getting Volkswagen to set up a manufacturing unit in the state is in tatters after it came to ...

The Andhra Pradesh Government’s dream of getting Volkswagen to set up a manufacturing unit in the state is in tatters after it came to light that an Indian firm to which it transferred two million euros to start a joint venture has nothing to do with the German automobile major.

The Government transferred the money last January to Vashishta Wahan which claimed to be the Indian arm of the German major. But Volkswagen denies having any stake in the firm and says it is yet to decide on a manufacturing unit in India.

The Opposition Telugu Desam Party has alleged widespread irregularities in the deal and demanded a CBI inquiry into the case, which has been highlighted by ARD German Radio.

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The Government had been dealing with Helmut Schuster who was sacked last month over fraud and bribery allegations. Schuster had written to the Andhra Government in January saying Volkswagen had agreed to set up a plant and asked it to transfer money to Vashishta Wahan.

A firm, Vashishta Wahan, is registered in Delhi in the name of an Ashok Jain, who was Schuster’s chief adviser and was sacked by Volkswagen in mid-2004. Jain could not be contacted.

Public Safety Minister Gary Anandasangaree said the designation gives law enforcement “enhanced powers to combat a group that has instilled fear through violence and intimidation”.

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