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Last Updated: Monday, 4 July, 2005, 13:09 GMT 14:09 UK
Scandal-hit VW 'halts India plan'
VW chairman Bernd Pischetsrieder
VW's boss has called in auditors to check if bribes were paid
Volkswagen has postponed making a decision on plans to build a new factory in India in the wake of a bribery scandal at the German carmaker.

Business daily Handelsblatt said VW boss Bernd Pischetsrieder had put the plans on hold amid allegations of bribes relating to the project.

Last week VW called in auditors KPMG to review bribery allegations at the firm.

VW also asked German prosecutors to investigate allegations against former staff at its Czech unit, Skoda.

Assembly plant

The scandal was triggered by the surprise resignation last month of Helmuth Schuster, Skoda's former personnel chief.

Mr Schuster quit amid allegations he took bribes from potential suppliers and set up companies to secure foreign contracts for VW.

Separately, Berlin daily Tagesspiegel said plans by VW to build an assembly plant in Angola had also been postponed.

VW declined to comment on both reports.

The problems at VW widened last week when the head of VW's powerful general works council, Klaus Volkert, said he would step down nine months earlier than planned.

Media reports had linked Mr Volkert to the bribery scandal, although he denied any wrong doing.

VW, which owns Skoda as well as the Audi, Seat and Bentley marques, reported lower-than-expected first-quarter net profits in April of 70m euros ($91.5m; 48m).

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