Andhra govt refuses VW compensation

Cites CBI enquiry into the alleged swindling by Helmut Schuster.

The Andhra Pradesh government today refused to accept the money from Volkswagen's goodwill ambassador Frank Elbe, citing the CBI enquiry into the alleged swindling by Helmut Schuster, an ex-representative of Volkswagen in India.

Elbe met Chief Minister YS Rajasekhara Reddy this morning at his residence and offered a demand draft for Rs 11.67 crore, an amount equivalent to the equity share capital released by the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) to Vasishta Wahan Private Ltd in January 2005.

"The Andhra Pradesh government places on record its appreciation for the unilateral gesture by Volkswagen in sending the said amount. The government is, however, unable to accept this amount at this juncture as the CBI inquiry is at an advanced stage," the government said in a press release after the meeting.

However, the government accepted the formal invitation extended by the company through Elbe to visit the Volkswagen headquarters in Germany to discuss the fate of the project. Reddy said a team of officials would be visiting Germany on September 28 for further discussions.

Later speaking to mediapersons, Elbe, a former German ambassador to India, termed the government's refusal to accept the money as a noble gesture. He termed Vasishta Wahan, to which APIIC released the money, as a fake company and said the company's gesture to return the money was towards the damages suffered by the government.

'More than the money, we are interested in finding out what went wrong and who all are involved in the money swindling case, including the role of persons in the government as alleged by the Opposition,' Reddy told the media.

'I have always maintained that getting the money back was not a problem. Our entire effort is to ensure that Volkswagen's car manufacturing plant is set up in the state, which is very much certain,' he said.

He admitted that the government had offered alternate places in the state to Volkswagen recently in addition to Vizag for a possible location to set up their plant. However, he refused to name those places.