Raja has filed a criminal case and a suit for damages against VW executives in Delhi. He responded to Business Standard's queries through his Delhi-based law firm Titus & Co.
Why did you form a joint venture with Volkswagen? Have you been involved with automobiles before?
In January 2004, I was approached by Ashok Jain in Dubai who introduced himself as Volkswagen's chief adviser in India. He told me that Volkswagen was looking for an equity and financial partner for their joint venture in India.
At this stage he introduced me to Helmuth Schuster who was head of the Volkswagen India Project, and the chief executive of Volkswagen Pension Trust. I found the prospect of joining Volkswagen very attractive as I didn't have an exposure in the automobile sector in India.
Jain said that apart from equity funding Volkswagen was also looking for a partner who would be able to raise finance for the project over the long term.
What was the nature of the joint venture?
Volkswagen was to hold 51 per cent, my company Celestial Ventures Private Limited was offered 46.5 per cent and it was decided that we offer 2.5 per cent for 5 million to the Andhra Pradesh government. The joint venture was incorporated as Vashishta Wahan Private Limited on January 12, 2005.
Did it ever strike you as odd that Volkswagen was looking for a joint venture partner in India in spite of the presence here of Skoda, which is a Volkswagen's subsidiary? Skoda India never sought a partner.
I never really questioned Schuster as I was very keen to participate in the venture. Moreover, Volkswagen had entered into a joint venture in China.
How did Schuster defraud you?
Soon after the structure of the joint venture was decided, Schuster said that I must make a payment of 5 million as commitment fee to Volkswagen.
He demanded that the payment be made to EE Trading, a company registered in Dubai. I was told that EE Trading was the worldwide project development consultant for all Volkswagen projects.
The payment he said was fees for services to be provided by EE Trading in the development of Volkswagen India project. I made a payment of 300,000 to this company in December 2004. I didn't realise the company was personally owned by Schuster.
When the Andhra government put in 2 million into Vashishta Wahan, Schuster started pressurising me that this money should be remitted
Our eyes actually opened in July 2005 when we learnt that Volkswagen's internal audit had initiated investigations against Shuster for widespread fraudulent dealings. At this stage, Volkswagen distanced itself from everybody that Schuster had dealt with.
How was I to know that Shuster was a crook? All along I dealt with him thinking that I was dealing with a very senior official from Volkswagen who had the full support of the company behind him.
Volkswagen sought my cooperation in their investigations, I have held nothing back from the German prosecutors or Volkswagen's internal audit team. For all my help, Volkswagen must squarely clear my name and compensate me the financial loss I have incurred.
Shouldn't you have contacted other senior executives of Volkswagen, especially when Helmuth Schuster began to act difficult?
After my initial meeting with Schuster in Dubai, I visited Volkswagen's headquarters in Wolfsburg several times. On one visit, I gave a presentation which was attended by several senior officials of Volkswagen that included Alfred Strohlein (Head of Legal, Foreign Holdings and Projects).
Also present were Hans-Georg Raber, L Wagner, Peter Schrickel, Ingrid Petersen and L Englisch. I have correspondence records with many of these officials which can conclusively prove that many senior Volkswagen officials knew of me as Volkswagen's Indian partner.
Why did it take you so long to file a criminal complaint against Schuster?
We had to talk to lawyers and prepare the case. It is a somewhat lengthy procedure, so many documents have to be studied.
What is the loss you have suffered?
The biggest loss has been to my reputation. In monetary terms, my company Celestial Overseas Ventures paid Schuster 300,000. Then Vashishta Wahan paid Schuster a further 771,900. I incurred huge expenditure in attorney fees and travel in negotiations with Schuster and his colleagues at different locations in Europe. Over a period of one year I met him in Dubai, London, Amsterdam, Germany and India.
Are you likely to remain associated with Volkswagen?
Volkswagen is right now busy settling scores within the company. The German Police has cleared me of any wrongdoing and they have done so in writing. They have put in a word for me at Volkswagen, but the company strangely continues to be silent.