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The Volkswagen car scam in Andhra Pradesh on Tuesday took a new turn with the German auto major offering to return to the state government Rs 11 crore (Rs 110 million), allegedly swindled by its sacked India representative Helmuth Schuster.
However, Andhra Chief Minister Y S Rajasekhar Reddy has declined the offer.
"In view of the ongoing CBI inquiry into the issue, we have declined to accept the money. We are more interested in seeing that Volkswagen sets up its car plant here," Reddy told reporters after meeting the visiting Volkswagen special envoy Frank Elbe in Hyderabad.
In an apparent damage-reduction exercise by the European car giant, weighed down by a series of corruption scandals, Elbe called on the chief minister here and sought to hand over the cheque for Rs 11 crore, owning moral responsibility for the alleged fraud committed by Schuster who is now facing investigation in Germany.
The scandal pertains to the 'hurried payment' of Rs 11 crore made by the state government to a Delhi-based firm Vashisht Wahan which was supposed to be the Indian arm of Volkswagen and a Special Purpose Vehicle to execute the proposed car plant at Visakhapatnam.
The money was, however, spirited away by Schuster and his accomplices, causing major embarrassment to the Congress government which has since ordered CBI probe into the scam and shifted the Minister B Satyanarayana from Major Industries portfolio.
Confirming that Volkswagen envoy had offered to hand over the cheque to him, the Chief Minister said "I have been maintaining that the money paid by the state government (to Vashisht Wahan towards its equity contribution) will be safe and secured. We only need to identify the persons responsible for the goof-up."
"In the interest of transparency and in view of the ongoing investigation by CBI, we are not accepting the money that Volkswagen wants to return to us," Reddy said.
He said a team of senior officials from the industries department would leave for Germany on September 28 to hold discussions with Volkswagen authorities on the proposed car project.
He also exuded confidence that the project would become a reality despite the recent obstacles.
Asked whether his government was proposing alternative sites for the car factory, the chief minister said: "All possible alternatives were already looked into before deciding on Visakhapatnam."
The car scam had triggered a major political furore in the state with the entire Opposition demanding dismissal of the then major industries minister, accusing him of direct involvement in siphoning off the public money.