CBI files charges in Vashishta Wahan-VW case

The Central Bureau of Investigation (CBI) today filed a chargesheet against six people, including the former head of India operations of Volkswagen, Helmuth Schuster, for alleged involvement in the Volkswagen-Vashishta Wahan scandal, which triggered a political furore in Andhra Pradesh in 2005.

In a 150-page chargesheet filed in the designated court at Nampally here, CBI framed charges against the accused under Section 120 B (criminal conspiracy) and Section 420 (cheating). CBI took up the probe in August 2005.

However, the investigating agency gave a clean chit to Andhra Pradesh minister Botsa Satyanarayana, who was holding the industries portfolio when the alleged fraud came to light. Satyanarayana, now the panchayati raj minister, was the target of opposition attack after the scandal broke out.

Besides Schuster, the other accused sacked by Volkswagen include businessman Jagdish Alaga Raja and his sister Gayatri Chandravadanan, Ashok Kumar Jain, B K Chaturvedi and Joseph V George. They allegedly colluded with the German executive in floating a fictitious firm – Vashishta Wahan – to cheat the state government. CBI examined 59 witnesses during its investigation.

The scam involved missing Rs 11.67 crore that the government had deposited towards its share of equity in the New Delhi-based company, Vashishta Wahan. Vashishta Wahan was supposed to be an Indian arm of Volkswagen, but turned out to be a fictitious entity.

The payment was made as part of a commitment to get Volkswagen set up a car manufacturing plant near Visakhapatnam. The case came to light when Volkswagen sacked Schuster in July 2005 on charges of financial irregularities and denied that Vashishta Wahan was its subsidiary. The German company even offered to return the money paid by the government. However, the government refused to accept the money till the completion of the CBI probe.

Schuster is still at large. He has been placed on the wanted list of CBI. An Interpol notice was issued against him five years ago. Meanwhile, Satyanarayana said he felt relieved as CBI gave him a clean chit. The opposition — the Telugu Desam Party and the Bharatiya Janata Party — had then alleged that Satyanarayana and his brother played a role in floating the fictitious company in collusion with Schuster.