GM in Spotlight Over Corporate Fraud Allegations in India

GM in Spotlight Over 'Corporate Fraud' Allegations in India

Oct. 23, 2013
A government investigation had alleged that senior GM India executives violated engine testing norms and committed fraud.

NEW DELHI -- Indian government officials were tight-lipped Tuesday over claims a transport ministry panel had accused General Motors (IW 500/5) of "corporate fraud" over faulty engine-emission tests.

The Times of India and other local media said a government investigation had alleged that senior GM India executives violated engine testing norms and committed fraud.

The three-member panel probing the alleged violations by GM India submitted its report to the Ministry of Road Transport earlier this week, a department spokesman said.

"We are considering the report and can make no further comment," the spokesman said.

P. Balendran, GM's India vice-president, said the company could not comment as it had not seen the report.

In July, GM's India unit recalled 114,000 Chevrolet Tavera SUVs and suspended production of the vehicle to fix emission and other problems in one of India's biggest auto recalls.

The Tavera range is one of GM's most popular models in India. The diesel-powered SUV has a starting price of 689,553 rupees (US$11,665).

After the July recall, GM said it had fired "several employees" over violations of company policy.

The Detroit-based automaker at the time did not disclose the nature of the violations or specify the number of employees dismissed, but said GM takes "these matters very seriously and (we) hold our leaders and employees to high standards".

The Economic Timesreported earlier in the year that the carmaker had told Indian authorities some employees identified engines with lower emissions "which were fine-tuned and kept aside to be used for installation on vehicles during inspections."

India's government formed the panel to probe the recall and to decide if punitive action should be taken against GM.

Sanjay Bandopadhyaya, a senior transport ministry official, said after the panel was set up that GM could face fines, and added the government was also investigating the possibility of collusion with testing agencies.

GM has poured billions of dollars into plants and product development in India that it has described as a key to powering future sales.

Copyright Agence France-Presse, 2013

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