Our Bureau

Hyderabad, July 31

A SPECIAL envoy of German carmaker Volkswagen AG is in Hyderabad to hold parleys with the State Chief Minister, Dr Y.S. Rajashekhara Reddy, and other officials.

Mr Frank Elbe, former ambassador to India during 90's, was nominated by the Volkswagen Chief Executive Officer, Mr Barnd Pischetsrieder, to serve as the company's envoy and the same was intimated to the Chief Minister earlier last week.

On Saturday, the State Government had received communication from Indian ambassador in Berlin, Mr T.C.A. Rangachary, conveying that the former German ambassador would call on the Chief Minister and also finalise plans for a possible interaction with the CEO of the company and fix a mutually convenient date for further talks.

In the recent communication to the State Government, Volkswagen has said that though the company has temporarily put on hold the car plant, it is very keen on entering the Indian car market.

This was first such communication by the company CEO to the State Government over the last four years since negotiations for the car project were initiated.

Earlier this year, the member of the Skoda Board and head of the India project for Volkswagen, Dr Helmuth Schuster, allegedly involved in certain controversial deals, resigned in June and an inquiry has since been instituted against him.

While the German car maker, owning responsibility for Dr Schuster's actions, has agreed to make good the amount of about two million euros deposited by the State Government in Vashishta Wahan, the Special Purpose vehicle, formed for the Indian project, it is still not clear as to where the funds have been siphoned off.

The ongoing probe also seeks to track the fund flow.

(This article was published in the Business Line print edition dated August 1, 2005)
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