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Last Updated: Tuesday, 5 July, 2005, 17:26 GMT 18:26 UK
VW shareholder calls for probe
Bonnet of Volkswagen car
VW is going through a bleak patch
VW's largest shareholder, the state of Lower Saxony, has called for a full investigation into allegations of bribery at carmaker VW.

VW has put a decision to build a new factory in India on hold following claims an executive took bribes and set up firms to secure contracts for VW.

Lower Saxony state premier Christian Wulff called for a full investigation.

But VW's deputy chief said the conservative politician's request was politically motivated.

VW's deputy chief Juergen Peters, who is also head of the IG Metall metalworkers union, suggested that if the Christian Democrat politician's attack was justified, he should lay out his claims at an extraordinary supervisory meeting.

His view is that Mr Wulff's allegations are aimed at casting doubt on Volkswagen's labour-management system, which epitomises the German "social contract" - whereby managers and workers share in decision making.

The bribery scandal erupted last week following the surprise resignation of Helmuth Schuster, VW unit Skoda's former personnel chief.

Klaus Volkert, the head of VW's powerful general works council also stepped down.

Media reports had linked Mr Volkert to the bribery scandal but he has denied any wrongdoing.

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