BMW India cries foul as senior official held for fraud
26 Jul 2014
The Hyderabad Police have arrested a senior executive of the Indian arm of German carmaker BMW on charges of cheating and conspiracy.
A senior police officer said on Friday that a court had ordered investigation based on a complaint filed in 2010, and BMW India Financial Services managing director Stefan Schlipf has been arrested.
The case pertains to Delta Cars Pvt Ltd, who were BMW dealers in Hyderabad from June 2007 to December 2009. The dealership agreement expired on 31 December 2009 due to non-renewal.
As a result, Delta Cars filed lawsuits in 2010 against BMW India, the carmaker said. In its complaint, Delta Cars alleged that it incurred losses due to pressure of excess supply of cars, which ultimately resulted in a heavy interest burden.
However, Stefan Schlipf was appointed managing director of BMW India Financial Services on 14 April 2013.
During the period of the allegations, between 2007 and 2009, Schlipf was employed in BMW Bank GmbH and was based in Munich, and was not present in India during the period of dispute with Delta Cars and until Thursday, he has never been accused in the lawsuit, the BMW statement said.
"We arrested him following due procedure. He was produced before a court and remanded," the police official said.
Schlipf was arrested in Gurgoan on Thursday and brought to Hyderabad on a transit remand.
BMW India's president and managing director is the prime accused in the case, while Schlipf is accused number 6.
BMW almost immediately issued a statement condemning the arrest of its executive.
"BMW Group India has raised a strong objection to the arrest of Schlipf with the authorities. Schlipf was not present in India during the period of dispute. The company considers this incident as completely unacceptable.
"As one of the most reputed global companies, the BMW Group has very strict compliance guidelines and processes. BMW Group India or any of its directors have not engaged in any wrongdoings and the company will take necessary legal action," BMW said in its statement.