Scania gave luxury bus to Nitin Gadkari as kickback?

Internal investigation by the Swedish company has found that its officials worked closely with the Indian minister’s sons to deliver the bus through a series of fronts.

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On March 9, when an investigation by Swedish network SVT, Germany’s Zweites Deutsches Fernsehen, or ZDF, and India’s Confluence Media claimed that road transport and highways minister Nitin Gadkari had received a luxury bus from Swedish truck and bus maker Scania for personal use as a kickback, the denial was immediate and definite.

The minister called the allegations against him and his family “malicious, fabricated and baseless”. A few days later, in an interview with the Print, he accused the reporters of not doing due diligence while claiming that Scania had denied gifting any bus to him.

The minister’s claims are misleading, if not an outright lie. There is now irrefutable evidence in the form of mobile chats, emails, contracts, receipts, and unsecured loan transfers that establish the active role of Gadkari’s family in accessing the luxury bus from Scania.

The reporters are in possession of an internal investigation report commissioned by Scania that calls the bus a kickback for Gadkari, and leaked communications over three years between Gadkari’s sons, companies linked to them and Scania India officials. All these communications have been verified by forensic experts in India and Sweden.

The report clearly states that Nitin Gadkari and his sons, Sarang and Nikhil, were the actual acquirers of the bus.

Sarang and Nikhil were in direct touch with a top executive at Scania’s Indian subsidiary – Scania Commercial Vehicles India Private Limited – at every step of the deal for the bus, which was allegedly used at the lavish wedding of their sister Ketki Gadkari in Nagpur in December 2016

Multiple Scania AB officials in Sweden, including the CEO, have confirmed that the bus was meant for Ketki’s wedding and that top Scania India employees were aware of the real intention behind the deal.

Internal communications show the deal for the “bus for the minister” was discussed among top Scania India employees.

Scania and the Gadkari brothers sealed the deal by hiding behind small, unknown private companies, but there is enough evidence that the bus was actually meant for the “minister” and his family, notes the internal investigation.

In the course of 18 months, from when discussions about the deal began to when the bus was delivered to Nagpur, Sarang visited Scania’s factory in Bengaluru allegedly to “inspect the bus”. He also twice visited a private design firm in Pune, Dilip Chhabria Design Private Limited, or DC Design, which modified the interiors of the bus as per the Gadkari brothers’ wishes. He was accompanied by a Scania official on all the visits.

While Sarang was regularly informed about the development of the bus, Nikhil was in direct communication with a Scania executive at the beginning and end of the deal. In fact, requests for clearing payments for the bus also went to the Gadkari brothers instead of the company that actually rented the Scania bus.

A company run by Sarang, where Nikhil also holds an important position, gave an unsecured loan to the company which got the bus on lease. This loan allegedly covered a part of the security deposit for the bus. Nitin Gadkari has denied any link with the firm that rented the bus.

Scania’s investigation does not give a clean chit even to the company that financed the bus, Volkswagen Finance Private Limited. It notes that Volkswagen Finance knew the bus was for the minister and deliberately didn’t check the backgrounds and financial stability of the companies involved before sanctioning the loan. Volkswagen Finance is a part of Volkswagen AG, which is based in Germany. And Volkswagen AG is the parent company of Scania AB.

Once the bus was delivered to Nagpur, its full rent and security deposit was never paid either by the front company or by the Gadkari family. As a result, the company which had purchased the bus from Scania started defaulting on the loan. The entire burden of the bus, its expensive modifications and the piling interest on the loan, fell on Scania, which had provided a 100 percent guarantee for it.

So, Scania covered the cost of this bus from its own pocket and, despite strong evidence, never reported the alleged corruption to authorities either in Sweden or in India.

The denial and the lies

The allegation of corruption in the sale of the customised Scania Metrolink K410 bus with reclining red leather seats, pantry, vinyl flooring, changing room, music systems, and TV sets was first brought to the notice of the Scania Group Internal Audit team, or GIA, in November 2017.

The team, with its members in Sweden and Germany, concluded in November 2018 that the bus constituted a financial benefit to the minister and his family. And the extent of the benefit, says the investigation report, should be subject to legal assessment.

The bus was sold by Scania to a transport firm in Bengaluru, called Transpro Motors Private Limited, in 2015. It was then modified by DC Design and another private Indian company, and given on rent to a hospitality firm in Nagpur called Sudarshan Hospitality Management Services Private Limited in November 2016.

The GIA report states that Transpro Motors and Sudarshan Hospitality had no actual connection to the bus, they were merely used as fronts for the deal.

The bus was acquired with a loan from Volkswagen Finance. The deal happened through Scania Commercial Vehicles India, which gave a 100 percent guarantee for the loan. Full instalments for the bus remained unpaid until the end of the lease period. As a result, the burden of the entire deal, amounting to Rs 2.2 crore, fell on Scania India.

Volkswagen Finance says it has reclaimed the bus and recovered the cost. Though it has recovered the cost from Scania, it hasn’t produced any evidence to support its claim that it reclaimed the bus.

Two days after the story of this Scania luxury bus and how it exchanged hands to reach the alleged actual beneficiary was released by ZDF, SVT and Confluence Media, a lawyer for Nitin Gatkari sent a letter to SVT to take down the story. SVT refused.

Back in India, Nitin Gadkari’s office called this an internal matter of Scania and said the minister and his family had nothing to do with either the purchase or sale of any Scania bus or any firm or individual who might be linked with it.

While the Indian minister washed his hands off the deal, Scania tried to mislead and cover its corrupt actions by allegedly lying on record.

Scania AB pretended to punish its officials who were allegedly involved in the corrupt deal by terminating their contracts. But digging deeper into the claims made by Scania confirms that the company not only suppressed the internal investigation report for two and a half years after it was submitted with supporting evidence, it also retained some of the indicted employees.

Scania AB and Volkswagen AG, which sourced and financed the bus, respectively, gave conflicting accounts of where the luxury bus is now and who its owner is.

The setup

Scania AB incorporated its India office in 2011 in Bengaluru, Karnataka. Eyeing India’s large market for heavy vehicles, in March 2015, the company inaugurated its bus and truck manufacturing factory in Narsapura, on the outskirts of Bengaluru, with an investment of Rs 300 crore.

It was flagged as one of the big successes of prime minister Narendra Modi’s ‘Make in India’ campaign, launched in 2014.

Senior BJP leader Nitin Gadkari took over as the minister for road transport and highways in Modi’s cabinet the same year.

The conversation about the luxury bus started in the first week of June 2015 – about two months after the Scania factory in India was launched – between the director of sales of Scania India, V Sivakumar, and ‘Nikhil’ from Purti Group.

Sivakumar emailed Nikhil pictures of a Scania 7 Star Luxury Camping Coach, asking whether he had any preferences or specific modifications in mind.

“I will meet you personally to finalise the same. We will give you specially crafted graphics as per your choice along with interior colour themes as per your choice,” wrote Sivakumar, a seasoned salesperson who had moved to Scania from a competitor firm in 2012.

The GIA established that Nikhil in the email is the son of Nitin Gadkari and that he and his brother Sarang were at that time running the Purti Group, which was founded by Nitin Gadkari in 1995.

Sivakumar, who allegedly played a key role in ensuring that the deal went through smoothly, then took the bus conversation to DC Design. On July 30, he wrote to a senior representative of the Pune firm that Sarang Gadkari would visit on August 2 to discuss the layout and design for the Scania bus.

“Reference to my telecom with you, me and Mr Sarang Gadkari will be in Pune this Sunday to discuss layout and design for Scania Metrolink Camper Coach on Scania buss shell of 14.5 M...Kindly keep the draft layouts and design ready…We will meet you at 11 am at your factory in Pune,” Sivakumar said, attaching an illustration of the camper coach layout.

By then, discussions were in full swing in the Scania India office on how the deal was an important milestone for the company. On November 17, 2015, Scania’s then sales strategy executive looped in 10 people – including director, production of buses and coaches, Helmut Schwartz, Scania India CFO Ulf Fromholz and Sivakumar – in an email thread called ‘Metrolink for Mr Gadkari’.

“The chassis allocated for Scania 14.5 m Metrolink bus for Mr Gadkari is 1890275. Request to kindly start the activities so that we can deliver best quality bus by mid-December’15,” the sales executive wrote. “Mr Gadkari wants the bus to be delivered by mid-December ’15.”

Schwartz objected as the bus being demanded was in the final stages and its specifications couldn’t be changed. To this, Arun Rengasamy, then manager of sales, strategy and rentals, replied if they needed to deliver the bus by December 15, they would need it immediately. This had been decided at a management meeting, he added.

Sivakumar, replying on the email thread, supported Rengasamy, “This is a very important milestone for us. The transport minister has been waiting for this bus of ours. December mid is very crucial since he wants to have this bus during a very important family event…I have to be ready with the proposal by 23rd Nov for discussions with them.”

Six minutes later, the order manager replied if the minister had been waiting for this bus why had the team not seen the order. Sivakumar explained to the manager that there would be no order from the minister as the bus was a rental. “We have been discussing on this bus for the last one month and raised [this] in every PMM,” he wrote, meaning product management meeting.

On November 26, 2015, Sarang Gadkari visited the Scania India factory. The day before, Sivakumar had emailed six Scania India staff to make arrangements. “Tomorrow Sarang Gadkari Son of Nitin Gadkari Union Minister will visit our factory. He will spend time till lunch with us then I will be accompanying him to Excon venue,” he wrote.

He went on to explain Sarang’s agenda: “Inspection of Shell Bus of theirs” and “Richard and Helmut to support”.

Richard Wardemark was then director for service operations. He and Helmut Schwartz were both marked on the mail.

We emailed Schwartz, Wardemark and Rengasamy but received no response. We are not naming the sales strategy executive because we couldn’t officially reach out to him for comment.

Bus for ‘a very big man’

The bus was not ready to be delivered by mid-December, 2015. But Scania India had made progress in not just getting the shell bus reserved for the special deal, it had found a buyer as well.

A day after Sarang’s visit to the Scania factory, Nikhil visited the Bangalore International Exhibition Centre along with Sivakumar. There, they met MK Lakshminarayan, owner and director of Transpro Motors. Scania had appointed Transpro Motors its agent for bus sales two months earlier, on October 1, 2015.

At the exhibition, Sivakumar and Nikhil wanted to discuss an “opportunity” for Transpro Motors to buy a bus which would be used by a “very big man”. Lakshminarayn later told the GIA that the bus was for a minister.

In no time, Transpro Motors, a firm which was just a year old, was on board. On November 30, 2015 – four days after Sarang visited the Scania factory – Transpro Motors issued a purchase order for the Scania shell bus for Rs 1.2 crore on the insistence of Sivakumar, notes the GIA.

In its records, Scania made it appear like a regular sale deal. It was registered as a sale made to a private dealer at a profit of about Rs 4 lakh. Hence, from that day on, the bus ceased to be Scania’s property.

But, according to the GIA, the payment for the sale reflected in Scania’s books on September 21, 2016 – over 10 months after the bus was sold. And the amount paid to Scania was only Rs 1,19,61,505 and not Rs 1,20,13,133. No written sales agreement between Scania India and Transpro Motors was found by the GIA until the end of their investigation.

The GIA report notes that Sivakumar, at the time of getting the purchase order from Lakshminarayan, told him that Volkswagen Finance had agreed to fund the shell bus as well as modification of its interiors. “We will support you with the necessary brand guarantee for the same,” Sivakumar emailed Lakshminarayan.

A month later, Lakshminarayan received a list of documents from Scania’s regional manager for bus sales to be submitted along with the application for loan to Volkswagen Finance.

On December 24, 2015, Sivakumar emailed a final version of the bus layout called “Scania Proposal 8” to Sarang and assured him that the bus would be ready by mid-January 2016.

The proposed bus, the mail attachments suggested, would be fitted with an Asus media player, three TV sets – 40-inch Sony, 29-inch Sony and Carbon TV – Electrolux fridge, IFB microwave oven, Café Coffee Day coffee maker, Asus or Sony amplifier, wash basin, cordless mic, call bell switch, mobile charging points, inverters, CCTV cameras, wifi system, pantry, wardrobe with full length mirror and chemical toilet, among other fittings. The cost of the toilet cubicle alone was quoted at more than Rs 14 lakh.

In February and March 2016, Sivakumar sent Sarang pictures of options for interiors of the bus. The interior and exterior work on the bus was given to two firms, one of which Sarang would visit in August 2015.

So, in effect, Scania India’s head of sales was making promises of delivery to a person who, on paper, had no link to the bus, which was no longer Scania’s property.

Erasing the paper trail

On May 11, 2016, Scania made a fresh invoice in the name of Transpro Motors for Rs 1.8 crore, including the modification costs. The luxury bus, now worth Rs 1.2 crore, needed further modifications worth Rs 68 lakh which Transpro Motors would pay for.

The GIA found the invoice was issued on the direction of Scania India’s then managing director Anders Grundstromer.

But even though the invoice was in the name of Transpro Motors, the Gadkari brothers were deeply involved in the conversations about the bus.

On May 14, 2016, Sivakumar forwarded a quote sent to him by DC Design to Sarang Gadkari, asking for his advice. And by the first week of June, discussions started within the Scania India office on completing the work on the bus.

Sivakumar wrote to Ulf Fromholz and Grundstromer’s successor, Mikael Benje, explaining how this deal was important for the company and informing that the top management was very much in the know. He added that the transaction had been routed through a dealer.

“This is going to be a very important stakeholder the details of which are known to Mikael Benje,” he wrote. “For ease of handling this transaction as decided in meetings is routed through our dealer. The conversion work which is in final stages is going on for the last few months which is in final stages now. Mikael we discussed on this. The bus has to move on priority to DC Design for final work.”

Fromholz replied that they needed to support Transpro Motors in this deal. To this Sivakumar agreed and said the bus would go to Nagpur as a “one off proposal”.

We reached out to Grundstromer, Fromholz and Benje. All of them refused to comment.

The bus with chassis 1890275 and invoice 2015-16/CEI/NF/0427 then moved to DC Design’s workshop.

On June 18, 2016, Sivakumar told DC Design’s representative that Sarang wanted to visit Pune. It would be Sarang’s second visit to the factory.

Chats between Sivakumar and Sarang Gadkari reviewed by the GIA confirm that they were constantly exchanging updates on the work done by the design firm.

On July 9, 2016, the DC Design representative sent a final quote for customising the bus – to Sarang and not to the real owner of the bus, Transpro Motors.

“Please find attached herewith revised final quote towards interior customisation of Scania bus as per the interaction had with you and Mr Sivakumar today morning,” the representative emailed. “We would request you to kindly treat this offer as an exception rather than a precedent.”

The quote was for over Rs 67 lakh. While Sivakumar was copied on the email, Transpro Motors was kept out of the negotiation.

In less than 24 hours, Sivakumar replied that to the design firm’s representative he could go ahead and start the work as per the specifications he had discussed with Sarang, who was copied on the email. The purchase order would be issued by Transpro, which Scania would finalise within a week, Sivakumar added.

On July 15, 2016, as smoothly as everything else was flowing, Lakshminarayan gave his written approval to DC Design’s final quote.

Now that the bus was in the garage for a makeover, it was time for a final contract to hand over the bus to the Gadkari brothers.

On August 3, 2016, Volkswagen Finance sanctioned the loan for the shell bus, body fabrications and interior designs to Transpro Motors. The total amount was Rs 2,18,91,299 – Rs 1,20,13,134 for the shell bus, Rs 22,19,849 for fabrications, and Rs 76,58,316 for interior designs.

Rewind a bit: the sale of the bus took place in November 2015 and Transpro Motors got the loan in August 2016. In its books, according to the GIA, Scania shows it received payment for the bus in September 2016. So it all adds up: Transpro Motors could pay Scania only after it got money from Volkswagen Finance.

On September 19, Sivakumar informed Sarang on his Apple iMessage that the payment transfer by Volkswagen Finance would be completed during the day. Sarang asked for the RTGS number.

On October 27, 2016, Lakshminarayan sent a draft rental agreement to Sarang Gadkari and on November 11, 2016, Transpro Motors officially entered into a contract to rent the bus to a Nagpur customer for three years from November 11, 2016 to November 10, 2019.

This customer, however, was neither Sarang nor Nikhil. It was a private company working in the accommodation and food services sector called Sudarshan Hospitality Management Services Private Limited. On paper, both Nikhil and Sarang Gadkari have no link to the company.

Sudarshan Hospitality, or its owners or directors, had not appeared in a single conversation about the bus. Until, that is, one of its two directors, Priyadarshan Vivek Pande, signed the contract papers. Sivakumar signed the document as a witness.

Sudarshan and the Gadkaris

Sudarshan Hospitality began business on June 9, 2015, less than a week after the first discussions about the bus started between Scania and the Gadkari brothers. At the end of the financial year, the company’s profit and loss account was absolutely clean. It had no sales, hence no income. Its bank balance was Rs 98,892 and turnover zero. The company’s net worth was in the negative, Rs -2,01,108 and it signed a deal three months into the following financial to rent a luxury bus for a hefty sum.

According to the rental contract, Sudarshan Hospitality had to pay Transpro Motors an interest-free security deposit of Rs 1.2 crore which the transport company would refund at the end of the lease period of 36 months. According to Lakshminarayan, the GIA notes, Sudarshan was to pay the amount in three instalments, of Rs 40 lakh each, starting November 2016.

In addition, Sudarshan had to pay a monthly rent of Rs 20,000. For the entire lease period, this amount was Rs 7.2 lakh. If the rent wasn’t paid for over 60 days, Transpro could take the legal course and recall the vehicle.

The same year Sudarshan Hospitality signed the deal, it received an influx of funds from a company run by the Gadkari brothers. It got an unsecured loan of Rs 35 lakh from Manas Agro Industries, where Sarang Gadkari is wholetime director since June 15, 2016.

Manas Agro is one of a group of companies called the Manas Group. Nikhil is an advisor and a member of the management council of the Manas Group. His role is described as being overall in charge of running the affairs of the company.

On January 26, 2018, in a poor attempt to justify possessing and using the bus, Sudarshan Hospitality posted four photographs of the vehicle on its Facebook page, without description or even an offer to customers to hire it. These are the only photographs on its Facebook page.

By the end of 2017-18, Sudarshan was spending more than it was earning. It suffered a loss of Rs 82,132, and did not repay any of the loan taken from Manas Agro Industries.

In the next two financial years, Sudarshan’s auditors flagged that its unsecured loan of Rs 35 lakh from Manas Agro was not within the ambit of the law. The auditors could not verify if the lenders of the loan had ascribed to the laws.

“Declaration regarding the unsecured loan is obtained from the directors and related parties. The same has been accepted in good faith,” the auditors noted in a report. “There’s no other alternative to verify the relationship as well as compliance of section 185 & 186 for the lender party.”

Section 185 of the Companies Act of 2013 prohibits companies from advancing any loan or giving a guarantee or a security for any loan taken by the company’s directors or any person whom the directors are interested in. Section 186 lays down that a company which has defaulted on repayment of any deposits accepted by it or on payment of interest on deposits shall not make any loan, guarantee, investment or security until such default is subsisting.

Sudarshan’s auditors also noted in March 2019 that the company owned a bus which generated negligible revenue. But the firm kept claiming depreciation on it and the explanation it gave its auditors was unsatisfactory. “The transaction draws suspicion regarding the authenticity and validity of the transaction,” the auditors said.

The reporters reached out to Sudarshan Hospitality and sent a detailed questionnaire regarding their role in the Scania luxury bus deal and their links with the Gadkari family but received no response.

The flow of money, or the lack of it

As soon as the contract for the bus was signed, the money had to start flowing. First, from Sudarshan to Transpro and second, from Transpro to Volkswagen Finance.

Sudarshan had to pay a monthly rent of Rs 20,000 to Transpro, which in turn would pay an EMI of Rs 3,71,828 lakh, 18 times the rental fee, to Volkswagen Finance.

We spoke with two private transport operators about how rental contracts for luxury buses are designed. In a regular rental deal for a customised, brand new premium bus, they said, the monthly rent would be in lakhs. It would include running and maintenance costs, salaries of a driver and a helper, and a profit margin. In no circumstance will the owner of the bus quote the rent at lower than the EMI they are paying for the vehicle. A monthly rent of Rs 20,000 for a bus costing over Rs 1.8 crore is impossible, said one of the dealers. “We don’t charge this little even for a luxury car," he said.

Still, the contract, signed between two private parties, could easily have masked the real purpose of the deal had the money been transferred as promised. But with the bus now allegedly handed over to Nagpur, Transpro’s book entries remained blank.

So, eleven days after the lease contract was signed, a message was sent to Sarang Gadkari asking for Rs 30 lakh, allegedly the first instalment for the bus. The sender of the message wasn’t known, according to records with the GIA.

Sarang replied that it would be done the next day. When the money was still not transferred, Sivakumar nudged him, “Sir, payment not received in credit of Transpro he is quite struggling since his instalment is also due to financier kindly oblige.”

Transpro finally received the first instalment from Sudarshan on November 23, 2016. Only Rs 25 lakh instead of Rs 40 lakh. A day later, Sarang got a message from an unknown number thanking him and confirming that Transpo had received the payment.

By the following month, Lakshminarayan was owed Rs 55 lakh for security deposit and Rs 40,000 for two months’ rent. He waited patiently till the end of the month. But his account’s balance was stagnant at Rs 25 lakh.

His frustration with the deal was now evident. He sent an angry email to Sivakumar, who had steered the entire process and had brought Transpro Motors on board.

“If Pandey not paid second instalment by tomorrow, I want to discontinue that agreement by serving notice, I will take back that bus, and I run myself,” he wrote to Sivakumar on December 30, 2016. “This is breach of contract which was signed, ready to face any consequence, please tell him, he is not kind enough to take my call or reply my message, I am serious, till 4th January 2017, I will wait, then I will go with legal.”

Sivakumar asked him to email Sarang, and copy him. He assured Lakshminarayan that he would pursue the matter with both the Gadkari brothers.

“I will forward this mail also to Sarang so that he knows the situation. Let’s take him on call today morning,” Sivakumar wrote.

Immediately after this email exchange, Sivakumar aggressively followed up with the Gadkari brothers to get Transpro’s money cleared. He had frequent chats with Sarang and Nikhil, the GIA notes.

On January 2, 2017, Sivakumar sent an SMS to Sarang, “Dear sir LAKSHMI NARAYAN is under tremendous stress on payment to financier since he has also invested on margin money payments to financier. Request your kind support for transfer of payment to his account Kindly help.” Sarang did not respond.

On February 17, 2017, Transpro received Rs 10 lakh more from Sudarshan. The money due to Transpro now was Rs 85 lakh for security deposit and Rs 80,000 for rent.

In March, Sivakumar sent at least four messages on Nikhil Gadkari’s Apple iMessage and one SMS to Sarang Gadkari requesting them to settle Transpro’s payments. He even attached a photo of the contract’s terms and conditions.

On March 20, 2017, he wrote to Nikhil: “Sir tried calling you request your kind consideration on the payment due to Lakshminarayan. He is under tremendous pressure from financier who has sent a repossession notice kindly oblige sir with a transfer of the instalment due.”

On March 24, 2017, he again wrote to Nikhil: “Sir request your help financier has issued notice to lakshminarayan kindly help him with payment by tomorrow.”

On March 28, 2017, he messaged both Nikhil and Sarang: “Dear sir very humble request please sir please sir the financier has sent a legal notice to lakshminarayan kindly help him with transfer today sir Else he will be in problem sir in spite of helping us.”

Three days later, Laxminarayan got Rs 25 lakh from Sudarshan. By now, however, he was owed Rs 60 lakh for security and Rs 1 lakh for rent. The rent had not been paid even once.

Lakshminarayan was in a spot, the loan defaulter. For a month from April 10, 2017, Laksminarayan and Sivakumar exchanged emails about the loan Transpro Motors was unable to repay.

Lakshminarayan explained that as of April 2017, he had received only Rs 60 lakh from Nagpur when he should have received Rs 1.2 crore by January 2016. He had also not received Rs 7.2 lakh for rent. He felt he was being taken for granted. Sivakumar assured him that they could meet and discuss the problem.

Then, Sivakumar texted Nikhil, “Sirji request your intervention still 25 lakhs out of last month’s amount indicated by Amithji is pending kindly oblige sir Lakshminarayan is [under] tremendous financial stress since he has borrowed for the bus.”

On June 30, 2017, the GIA notes, Scania asked Volkswagen Finance if the loan for the bus could be transferred to a company called Travel Time Car Rental Private Limited as Transpro Motors was “not cooperating”. The request was declined by Volkswagen Finance.

Travel Time is a private transport company in Pune. It had taken a dealership of Scania’s buses in Maharashtra, just like Transpro had in Karnataka.

On March 20 and 24, 2017, Rs 12 lakh and Rs 3 lakh, respectively, were transferred to Transpro by Travel Time. Lakshminarayan told the GIA that this money was financial support for the bus. But in Transpro’s books, GIA notes, it is recorded as payments for services and not payments for the bus.

We asked Travel Time about money they had paid to Transpro Motors. Vivek Kalkar, one of the two directors of the company, replied, “We are rather surprised to see Scania has involved our name in their wrongdoings (if any). We have never benefited from any kind of relationship with any minister that you have mentioned. We outright reject all the allegations levelled against us which we find defaming and slanderous.”

On December 1, 2017, Nikhil Gadkari texted Sivakumar that the balance amount would be paid in 15 days. But when by December 26 no money had reached Transpro Motors, Sivakumar was back to him with his begging bowl. “The dealer is under tremendous stress and [has] not settled three instalments to VW finance,” he wrote. “You were kind enough to ensure that the payments will be settled before 15th December 2017. Kindly help in this sir since dealer Transpro is mentally and health wise affected on this please please sir kindly oblige.”

His pleading fell on deaf ears.

By now it was clear to both Transpro Motors and Volkswagen Finance that they wouldn’t get further payments for the bus.

Transpro had been repaying Volkswagen Finance the loan since October 2016 and it could only scramble to pay Rs 44,91,936 till November 2017. This was a fraction of the amount they had borrowed and 75 percent of what Sudarshan Hospitality had paid them.

On October 12, 2018, Volkswagen Finance’s head of credit assessment wrote to the senior manager for retail finance and credit control, Scania India, that Transpro still owed it Rs 2.21 crore. Since Scania India had offered brand guarantee for the loan and Transpo had failed to pay instalments, Scania should pay that amount.

In Volkswagen Finance’s books, as on September 30, 2018, the Transpro loan was listed as a non-performing asset. As on October 4, 2018, the outstanding debt was Rs 2.22 crore.

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A busful of lies

After the story about the Scania luxury bus to the minister first appeared, an Indian media house quoted Scania’s spokesperson Hans-Ake Danielsson as saying, “No, this particular bus was purchased from Scania India in 2016 by one of the company’s private dealers who delivered it to one of its customers [an Indian bus operator]. I’ve no information about the current status of the bus.”

The report added that Scania, through Danielsson, also denied engaging in a business deal with any person or company linked with Gadkari’s sons.

Nitin Gadkari referred to this report to absolve himself and his family from the corrupt deal. He called it an internal matter of Scania.

We confirmed these statements from Danielsson. He admitted that though his quote was fine, the other statement attributed to him in Indian news reports was misleading. “I recognise and stand for the quote,” he said. “However, the interpretation of what the family’s representative does appear to be slightly misleading since both you and I know the bus company that rented the bus from Transpro was run by a close relative.”

He reiterated in an email that Sudarshan was linked to Gadkari’s sons and that Scania had been able to establish that the bus was “rented” by the minister’s son.

“We also know the minister has used the bus for private use, as at the daughter’s wedding, but the explanation for this may be that the minister hired a bus company to handle transport at the party,” Danielsson added, “We have not been able to prove that the minister received the bus as a gift.”

Scania’s logic: “Do you really think a likely well-to-do Indian minister would receive a bus as a gift, especially if he could get help with transportation at buddy price from a son who runs a bus company?”

The union minister, according to his disclosure to the Election Commission in 2019, has assets worth Rs 24 crore. A year earlier, in a public speech, he had said his sons' companies had a turnover of Rs 1,100 crore.

Danielsson is not the only one from Scania who has spoken about the minister’s link to the bus.

On February 26, 2021, before the story was aired, Scania CEO Henrik Henriksson gave a video interview to SVT and said the company had information that the bus was used at the wedding of one of the minister's daughters.

He added that senior Scania employees in India wanted to hide this deal from the higher management abroad.

“So this was a deal that should never have been done. And it’s a deal where we have sold a bus to one of our private dealers and they, in their turn, sold it to a transport company with personal connections, family connections to a minister in India. And this our system should have picked up, and warning bells should have signalled to us,” Henriksson said. “But it did not do so because the system was bypassed by Scania employees, senior people in India, because they did not want to show that this transaction was completed.”

“They evaded our rules that we had set up, documentation was missing and they tried to avoid informing us,” he added, pinning the blame for the deal on Scania India’s officials.

But soon as Scania in Sweden found out about the corrupt deal, Henriksson explained, it cleaned the system and terminated the employees who were found guilty. He added that because of this corruption Scania even shut down its bus manufacturing unit in Narsapura that affected thousands of jobs.

The truth is that Scania shuttered its manufacturing unit in India in June 2018 due to poor sales and not because of corruption. It was reported by the media then, and two of Scania’s bus agents in India confirmed this to the reporters.

If we were to believe Henriksson, did Scania show poor sales as a cover-up for corruption in its India office?

A former Scania employee who was laid off when the bus plant was shut said the required paperwork to close the plant was never officially submitted by Scania to the Karnataka labour department.

Henriksson said the people found guilty of engaging in corrupt deals in the India office were terminated. But the timelines of the top Scania India officials leaving the company don’t match the time when the GIA submitted its findings. Some others were promoted to higher positions or sent to other countries, and are still employed by Scania.

Sivakumar, the alleged kingpin in the bus deal, left Scania in March 2018, more than six months before the GIA’s inquiry concluded. He joined a company which had a contract with Scania to produce bus coaches.

The reporters also confirmed from two former Scania India employees, one of whom was in the HR department, that Sivakumar wasn’t terminated over corruption charges. He resigned, with a fat sign-off package. They added that right before Sivakumar left Scania, he was allegedly called to the Volkswagen AG office in Germany twice.

Multiple efforts were made to contact Sivakumar. The reporters requested a meeting in person, which he declined. Contacted on the phone, he said he left Scania many years ago and wouldn’t like to comment on the matter. He did not respond to detailed questionnaires sent to him multiple times.

Helmut Schwartz and the sales executive who circulated the email titled ‘Metrolink for Mr Gadkari’ in 2015 left Scania in July 2017. Anders Grundstromer left Scania India in September 2016 and stayed in the Sweden office until July 2017. The three of them quit Scania over a year before the GIA findings were out.

Richard Wardemark left the Scania India office in October 2018, but he is now managing director of Scania’s Finland office, SOE Busproduction Finland Oy.

Ulf Fromholz, who was CFO of Scania India, was informed on January 11, 2018 that he would be fired, as per information obtained by SVT reporters. But until June 2018, he was still working at Scania Production Zwolle in the Netherlands.

Mikael Benje became Scania India’s managing director in January 2016 and took over as the team leader, defence, in Scania’s head office in Sweden in March 2018. But Volkswagen AG informed us that he no longer worked for the Scania group.

Jimmy Renström, who took over as CFO of Scania India on July 1, 2017, moved to Scania China two years later. Approached by the reporters, he declined to comment.

Arun Rengasamy rose rapidly in the Scania India office and is now the general manager, sales operations.

Did Scania retain a few employees who allegedly knew of the corruption in its India office? Did it remove those accused of involvement in the corrupt deal even before the GIA investigation was complete? Does this imply that Scania Sweden knew of the corruption? If the involvement of the top management in Scania India office in the corrupt deal was the reason for their termination, why was the matter not reported to the police or any other investigating agency either in India or in Sweden?

The reporters met Lakshminarayan in Bengaluru, but he refused to comment. He said Transpro Motors was folding its business in Hubli, Karnataka, handing over its factory to Scania and leaving Bengaluru for good.

A reporter of this story wrote to Nitin Gadkari and to his personal secretaries at the road transport and highways ministry four times between February 11 and 26, 2021 requesting an interview and sending detailed questionnaires. There was no response. The reporter then approached the Indian embassy in Germany to send the letter with questions to the minister. But there was no reply through this channel either.

We twice sent detailed questionnaires to both Sarang and Nikhil Gadkari. They didn’t respond.

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Where’s the bus now?

Technically, with Transpro Motors defaulting on the loan, the bus should have been repossessed by the lender Volkswagen Finance.

And before that, according to the contract, as soon as Sudarshan started defaulting on payments, Transpro Motors could have taken the bus back. But Transpro never went to court against their Nagpur renter.

Danielsson told SVT that after Transpro defaulted on the payments, Scania reimbursed Volkswagen Finance, which repossessed the bus in October 2019 and sold it.

Volkswagen also confirmed to the reporters that it repossessed the bus – but in March 2019 and not in October 2019. It did not specify what the company did with the bus after repossessing it.

But the auditors of Sudarshan noted that the bus was with the company until the end of March 2019. It was taken over by the finance company sometime before March 2020.

So, when exactly did Volkswagen Finance repossess the bus? And what did it do with it?

Sources in Volkswagen, Germany, told the reporters that the company did not know where the bus was.

Sources in Volkswagen Finance had told the GIA investigators, their report notes, that they did not even intend to act on the bad loan because they knew “the bus was a gift by Scania India to a high politician, who is currently a minister, with the main purpose to get approvals for deals in India”. And they wouldn’t be repossessing the bus from the minister, the sources added.

This is the reason the finance company allegedly did not do deeper due diligence of the Transpro loan as they normally would, notes the GIA. They did not check whether the security deposit of Rs 1.2 crore had been paid by Sudarshan Hospitality.

There were two reasons for this. First, the brand guarantee was by Scania India. Second, it was understood in the Volkswagen Finance office that the bus was a gift for the minister. The GIA makes these observations in its report.

Scania’s CEO skirted answering the question about the status of the bus. But the spokesperson, Danielsson, confirmed that they had information that Transpro sold the bus to a private firm in Nagpur called Ayodhya Commerce Private Limited, which was also linked to the ‘minister’. Scania, however, could not verify this information independently.

“The dealer Transpro Motors sold the bus to Ayodhya Commerce Private Ltd, a company that is also connected to the minister,” he explained. “There are allegations that Transpro sold the bus to Ayodhya at the request of Scania India. On the other hand, we have not been able to find evidence for this in our own surveys. According to official Indian registration statistics, as recently as last week [of February], Transpro Motors was still the owner of the bus.” The location of ownership has shifted from Bengaluru to Nagpur.

The company added that since the ownership of the bus had not shifted hands, there was a possibility that the bus was rented to Ayodhya by Transpro.

The Caravan reported earlier this month that a Scania Metrolink bus with license number MH31 EM 1530 was found parked in an abandoned plot belonging to Purti Solar Systems, a company linked to Nitin Gadkari and his sons, in 2018. On further digging, they could establish that the bus was registered on December 6, 2016 as the “Scania Metrolink HD 410 IB6”. Transpro Motors Pvt Ltd is named as its owner and, as Danielsson said, the ownership is now based in Nagpur. The status of the bus is active.

The reporters contacted Ayodhya Commerce, but did not receive a response. The claims made by Scania spokesperson about the ownership of the bus and the role of Ayodhya Commerce in the sale or rental of the bus could not be independently verified by the reporters.

Does this mean the bus was repossessed by Transpro and not by Volkswagen Finance? Did Volkswagen ever repossess the bus? If not, then did the company lie on record?

While the multinational companies figure out who possesses the bus now, Swedish authorities are preparing for action. Sources in Sweden informed SVT that the police and a prosecutor at the national anti-corruption unit have launched an investigation against Scania. While the prosecutor in Braunschweig is still weighing if he should start an enquiry.

But larger questions remain. Why did Scania pay for a bus which had links to an Indian minister? And what did Nitin Gadkari give to Scania in return for this favour?

This report is a collaborative effort between Sweden's STV, Germany's ZDF and India's Confluence Media. We have lightly edited the report for style and clarity, and are publishing it with their permission.


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