US auto dealers sue Mahindra & Mahindra for 'fraud'

A group of automobile dealers in the US has filed a lawsuit against Mahindra & Mahindra and its US arm Mahindra USA Inc, accusing it of fraud, misrepresentation and conspiracy.

In a press release posted on Wednesday, Michael Diaz, managing partner of Diaz Reus & Targ, the Atlanta law firm representing various dealers says according to the lawsuit, "Mahindra duped hundreds of US auto dealers and walked away with more than $60 million in cash and trade secrets" by simply reneging on its promises.

"Mahindra told the dealers that its light trucks and SUVs were ready for delivery to the US market. However, Mahindra intentionally delayed certification of its vehicles after obtaining dealership fees and trade secrets, and began pursuing other partners in the US and elsewhere in clear violation of their commitment," Diaz.

Mumbai-based Mahindra & Mahindra has firmly denied the allegations. "Mahindra unequivocally denies all allegations of fraud, misrepresentation and conspiracy," a spokesperson said, but declined to comment further as "the matter is in the courts".

In a statement, the company said, "We would like to state that some dealers had earlier filed a suit against Mahindra and Global Vehicles in the US District Court in Missouri. The Missouri Court dismissed all claims against Mahindra in that suit. Significantly, the Missouri Court also ruled that Mahindra could not be held liable for any action of Global Vehicles with respect to its dealers."

The latest lawsuit was filed on 4 June in the district court in Atlanta by dealerships in New Hampshire, Florida, California, New Jersey and Washington.