Mahindra faces lawsuit by dealers in in US

According to Michael Diaz, managing partner of Diaz Reus & Targ, the lawfirm that is representing various dealers, the lawsuit alleges that "Mahindra duped hundreds of US auto dealers and walked away with more than USD 60 million in cash and trade secrets".

"Mahindra told the dealers that its light trucks and SUVs were ready for delivery to the US market. However, Mahindra intentionally delayed certification of its vehicles after obtaining the dealership fees and trade secrets and began pursuing other partners in the US and elsewhere in clear violation of their commitment," Diaz said in a statement.

When contacted, Mahindra & Mahindra (M&M) said: "Mahindra unequivocally denies all allegations of fraud, misrepresentation and conspiracy."

The company, however, said it cannot make further comments as "the matter is in the courts".

In the lawsuit, Diaz Reus & Targ alleged that M&M duped hundreds of US automobile dealers and walked away with more than USD 60 million in cash and trade secrets.

The lawsuit was filed on June 4 in the district court in Atlanta by dealerships in New Hampshire, Florida, California, New Jersey and Washington.

"Dealers across across the country paid initial dealership fees, undertook marketing on Mahindra's behalf, built Mahindra showrooms, display platforms and showcases and hired additional personnel, all at Mahindra's urging," the statement said.

It further said M&M had "obtained USD 9.5 million in fees from the dealers" with a promise that products from the Indian auto maker would be launched in the US by 2008.

"Over the next two years, Mahindra continued to reassure the US dealers that its certification process was on target, while in fact it was delaying submitting its documentation to regulations as a pretext for terminating its agreements.

"Mahindra repeatedly failed to live up to its obligations. Now, after spending millions of dollars on behalf of Mahindra, the US dealers have nothing to show for their time and energy other than a series of false promises," the lawfirm said. MORE