The Hindu Business Line : Naidu demands Industry Minister's dismissal, probe into other issues

VOLKSWAGEN EFFECT: The Telugu Desam Party President, Mr N. Chandrababu Naidu, addressing a press conference on the Volkswagon controversy in Hyderabad on Thursday. At left is Mr K. Vidyadhara Rao. - P.V. Sivakumar

Hyderabad , July 14

THE Telugu Desam leader and former Chief Minister, Mr N. Chandrababu Naidu, has demanded that the Major Industries Minister, Mr Botsa Satyanarayana, be dismissed for the role he played in the negotiations with Volkswagen, the German car company, and for flouting norms in the release of funds without checking important issues.

Mr Naidu said even the Chief Minister cannot absolve himself because he had signed the file for release of Rs 11 crore to Vashishta Wahan. He should have checked the antecedents and whether there was any communication to support such a move to create a SPV from the Volkswagen side.

In addition, various issues relating to permission for release of 2 million Euros for overseas payments, and possible violation of RBI norms and foreign exchange regulations also need to be looked into, he said, while exhibiting a Government Order (GO) and a certificate of incorporation of Vashishta Wahan Pvt Ltd.

During the TDP regime, the Government had earmarked 150 acres for the car plant. However, Mr Naidu alleged that this was increased to 300 acres mainly aimed at helping some relatives of the Minister in setting up ancillary units. The CBI probe should also look into the role played by several individuals in the matter.

Interestingly, even as the Chief Minister and the Industries Minister were attempting to appear confident over the safety of Rs 11 crore invested in Vashishta Wahan, the AP Industrial Infrastructure Corporation (APIIC) is learnt to have asked the Government to initiate steps to recover the amount.

Following a GO issued by the State Government for the release of Rs 11 crore of funds towards equity, the APIIC had transferred the funds into the account of Vashishta Wahan held in a branch of HSBC Bank in New Delhi, which was subsequently encashed.

While the GO was issued on January 10 and APIIC released funds on January 13, Vashishta Wahan was incorporated subsequently.

According to sources in the Finance Department, the APIIC was supposed to release the funds only after incorporation of a clear special purpose vehicle.

A senior APIIC official said the Corporation released the funds only after it was directed to do so by the Industries Ministry. Further, the official said the Corporation received a letter from Vashishta Wahan stating that equity shares were being issued in lieu of the funds. The Corporation had even obtained the approval of the Finance Department before releasing the funds, he said.

"Now that the Government has sought a CBI enquiry into the entire episode, we hope it would reveal whether APIIC had acted in haste or according to the directives of the Government," the official said.

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