VW''s Indian plant goes on hold amid scandal

Berlin: The bribery scandal engulfing giant German carmaker Volkswagen AG has resulted in the group's chief, Bernd Pischetsrieder putting on hold a decision on the planned construction of a new factory in India, Germany's business daily Handelsblatt has reported yesterday.

VW has declined to comment on the reports.

The burgeoning bribery scandal, which centres on VW's Czech-based Skoda operations, has badly shaken the company and has already triggered two high-profile resignations from the company.

Skoda's personal chief, Helmuth Schuster, left the company in June amid allegations that he took bribes from potential suppliers and that camouflage companies were used to secure lucrative VW contracts abroad, notably in India and Angola.

Last week, the company was rocked again when the head of VW powerful works' council, Klaus Volkert announced that he was also stepping down.

VW, which is also Europe's biggest carmaker, slumped into the red last year and reported an operating loss of Euro 53 million in the first quarter of 2005.