“Metrolink for Mr. Gadkari”

In early March, when a Swedish public-television broadcaster, SVT, reported that an Indian subsidiary of one of Sweden’s largest vehicle manufacturers, Scania AB, had provided a luxury bus to Nitin Gadkari for his personal use, the minister’s denial was immediate and absolute. Gadkari, the union minister for road transport and highways, claimed to have no connection with the bus. But an internal audit by Scania AB, which we have accessed, reveals that the union minister outright lied. The audit examined emails and messages exchanged between top Scania executives and Gadkari’s sons, Sarang and Nikhil. Their correspondence revealed visits by the Gadkari family to the Scania facility in Bengaluru to inspect the bus, specifications about the desired interiors for the bus, and even disclosed payments organised by them. The audit report concluded, “The actual acquirers of the bus were Messrs. Nitin, Sarang and Nikhil Gadkari.”

The Group Internal Audit Report, titled “Investigation into the alleged provision of a Luxury Bus to a Senior Public Official,” was conducted from December 2017 to October 2018. The auditors scrutinised the phones, emails and hard drives of Scania India executives, which revealed the correspondence with Sarang and Nikhil, and subsequently ensured that this communication was verified by forensic experts at KPMG Sweden. The correspondence establishes a clear chronology of the events concerning the bus and reveals the close involvement of Sarang and Nikhil in the transactions, who were in direct and constant touch with Sivakumar Viswam, a former sales director at Scania India, at every step of the deal.

The audit examines communications of more than two years, starting from June 2015—shortly after a Scania India factory was setup near Bengaluru—until December 2017. During this period, Sarang Gadkari visited the Scania facility in Bengaluru to “inspect the bus.” He also visited the office of Dilip Chhabria Designs Private Limited, a popular car-design company that remodelled the interiors of the Metrolink bus. On both visits, Sarang was accompanied by Viswam.  

Internal communication between Scania India officials show that the deal of the “bus for the minister” was discussed with the highest officials within Scania. The bus in question was a Scania Metrolink HD, and communications concerning the bus in the Scania India office included an email thread among top executives with the subject line, “Metrolink for Mr Gadkari.” Multiple officials within Scania AB office in Sweden, including the CEO Henrik Henriksson, confirmed to us that the bus was meant for the wedding of Nitin Gadkari’s daughter, Ketki, which was held in Nagpur in December 2016.

The audit report noted that the Gadkari family and Scania India used two companies as fronts for the bus—Transpro Motors Private Limited, which is Scania India’s local dealer in Karnataka that formally bought the bus, and then rented it to a Nagpur-based company, Sudarshan Hospitality Management Private Limited. The audit also disclosed the financial transactions surrounding this sequence of events. This included loans issued by Scania India’s sister concern, Volkswagen Finance Private Limited to Transpro Motors for the purchase of the bus. Volkswagen Finance and Scania India are both subsidiaries of the German vehicles manufacturer, Volkswagen AG. The audit report annexed the rental agreement between Transpro Motors and Sudarshan Hospitality, but the correspondence showed that Scania India officials requested the Gadkari brothers to clear pending rent payments for the Metrolink, instead of asking the company that formally rented the bus.

Nitin Gadkari had denied any connection to “any individual or firm” connected to the bus. Earlier this month, The Caravan reported that the bus was seen in a Nagpur plot linked to Nitin Gadkari, and that Sudarshan Hospitality was inextricably linked to companies helmed by Sarang and Nikhil. Manas Agro Industries & Infrastructure Limited, where Sarang is a director, had issued an unsecured loan to Sudarshan Hospitality in 2016–17. The Caravan’s report revealed that there existed a dense network of interlinks between Sudarshan Hospitality, Manas Agro and Cian Agro Industries & Infrastructure Limited, where Nikhil is a director.

Scania’s internal investigation leaves no room for doubt about the involvement of the Gadkari family. It makes it irrefutably clear that the bus was ordered for the Gadkaris, remodelled after their inspection and as per their specifications, and financed with their assistance. In fact, Scania’s investigation does not even give a clean chit to Volkswagen Finance, noting that the company did not conduct the due diligence on the companies involved before sanctioning the loan, which would have been “necessary checks for any standard deal.”

The audit report further states, “According to sources at VW FS, it was their understanding that the bus was a gift by Scania India to a high politician, who is a currently a minister, with the main purpose to get approvals for deals in India.” The report does not determine whether Scania was awarded any such approval as a result of the bus, but it concludes that “the bus constitutes a financial benefit, which was provided to Mr. Nitin Gadkari and/or his family members. The extent and value of the financial benefit should be subject to a legal assessment.”

The report raises several questions of impropriety. For instance, why did the Gadkaris use Transpro Motors and Sudarshan Hospitality as “front companies” for the deal—as described in the report—to acquire the bus? Nitin Gadkari is among the most powerful men in the Bharatiya Janata Party and in Prime Minister Narendra Modi’s cabinet. In his 2019 affidavit submitted to the Election Commission, he declared a combined income of Rs 54,58,390 earned by his wife, his Hindu Undivided Family account and himself, and total assets worth at least Rs 24 crore. Sarang Gadkari’s Manas Agro recorded a net profit of Rs 9.64 crore in the financial year 2016-17, or FY17, when the bus was purchased, and Nikhil’s Cian Agro recorded a revenue of Rs 112.80 crore that year.

If the Gadkaris did want the bus for Ketki’s wedding, as stated in the audit report, why did they not purchase it on their books with the wealth they have amassed? Why, instead, were they closely involved and consulted in all matters concerning the bus, but kept out of the official records of all the transactions?

The Gadkaris and their front companies did not respond to queries.

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Scania AB incorporated its Indian subsidiary in 2011, with its registered office in Bengaluru, Karnataka. Eyeing India’s large market for heavy commercial 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. Soon after, the former managing director of the company, Anders Grundströmer, was seen in a video announcing the Bengaluru factory as a success of Modi’s Make in India initiative.

The first communication recorded by the Group Internal Audit team, referred to as the GIA in their report, between the Gadkari family and Scania officials took place just two months after the Bengaluru facility was set up. On 6 June 2015, the sales director Sivakumar Viswam emailed Nikhil Gadkari with the subject line, “Executive 7 Star Scania Metrolink.” Viswam attached photos of “the 7 star Scania Metrolink Executive Luxury Coach” and asked if Nikhil required “any specific preferences or modifications.” A seasoned salesman who had moved to Scania from a competitor firm in 2012, Viswam added, “I will meet you personally to finalise the same.”

Since the GIA had to rely on written communications sent and received by the Scania officials, there are certain gaps in the developments that the report does not address, which have to be pieced together from the available correspondence. On 30 July, Viswam wrote to one official at DC Design, referring to a meeting with Sarang in Pune, on 2 August, about the bus. Viswam wrote, “Reference to my telecom with you, me and Mr. Sarang Gadkari will be in Pune this Sunday (2nd August’15) to discuss on layout and design for Scania Metrolink Camper Coach on Scania buss shell of 14.5 M.” He added, “Kindly keep the draft layouts and design ready … We will meet you at 11 am at your factory in Pune.” Viswam attached an illustration of the bus’s layout.

By November that year, discussions on the bus were in full swing within the Scania India office. On 17 November, Samay Gupta, who was Scania’s sales strategy-executive at the time, sent an email with the subject “Metrolink for Mr. Gadkari,” marking ten people, including Helmut Schwartz, the director of bus production, Ulf Fromholz, the CFO of Scania India, and Sivakumar. Gupta wrote: “The chassis allocated for Scania 14.5m Metrolink bus for Mr Gadkari bus is 1890275.” The loan documents of the bus in Gadkari’s compound—available publicly on CERSAI, a government database of charges of all companies under the purview of the MCA—showed the same chassis number.

Gupta continued, “Request to kindly start the activities so that we can deliver best quality bus by mid-December’15 … Mr Gadkari wants the bus to be delivered by mid December’15.” Five minutes later, he sent another email, “Also the Metrolink 14.5 M bus will be a shell fully trimmed fitted with Chemical Toilet, Pantry and seats outside with a body builder or at our dealership.” The next day, Sivakumar reiterated on the thread that it was “crucial to invoice one shell fully trimmed” and for the fittings “to be done through a body builder” because the “Minister wants to have this bus by mid December’15.”

A shell bus refers to the physical chassis and outer body of the bus. The emails accessed by the GIA suggest that the Gadkaris wanted the shell of the Metrolink HD but with heavy modifications to the interiors.  

When Schwartz responded that the specification of the bus could not be changed, Viswam replied, “This is a very important milestone for us.” He added, “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.” Six minutes later, another Scania official replied, “If the Transport Minister had been waiting for this Bus, how come we have not seen the order until now??? Where have this order been waiting?” Viswam clarified that the bus would be “a rental” and that “there will be no order from him.” In a slightly combative note, he added, “If there are any constraints in supplying this bus please do let me know. We have been discussing on this bus for the last one month and raised in every PMM”—product management meeting.

Eight days later, on 26 November, Sarang Gadkari visited the Scania India factory. In an email with the subject line “Gadkari Son Visit,” Viswam wrote, “Tomorrow Sarang Gadkari Son of Nitin Gadkari Union Minister will visit our factory.” Viswam also listed the agenda for the meeting, which included “Lunch with Anders”—possibly referring to Scania India’s managing director—and “Inspection of Shell Bus of theirs.” Right below this, he wrote, “Richard and Helmut to support”—Richard Wardemark was then the director of Scania India’s service operations. Both Wadermark and Schwartz were marked on the mail.

Schwartz and Wardemark did not respond to queries emailed to them. We were unable to trace Gupta’s contact number and email address, messages sent to him on LinkedIn and Facebook went unanswered.

The bus was not ready for delivery by mid December as desired, but Scania India officials succeeded in reserving the shell bus for the Gadkaris and finding a front company for the transaction. Viswam’s email about Sarang’s visit to the Scania India office had mentioned, “He will spend time till lunch with us then I will be accompanying him to Excon venue.” The “Excon venue” referred to the eighth edition of the International Construction Equipment & Construction Technology Trade Fair, which was held at the Bangalore International Exhibition Centre between 25 and 29 November that year. It is at Excon 2015 that Viswam seems to have found the Gadkaris their buyer for the bus—Transpro Motors Private Limited.

Transpro Motors was incorporated in February 2014, and according to another internal audit report at Scania AB, Scania India had appointed Transpro Motors as its agent for bus sales on 1 October 2015. Less than two months later, on the day after Sarang’s visit to the Scania India factory, the GIA report notes that Nikhil and Sivakumar went to Excon 2015 and met MK Lakshminarayan, a director of Transpro Motors. The audit team had interviewed Lakshminarayan on 1 October 2018. The director told the GIA that Viswam and Nikhil approached him at the Excon venue and said that they wanted to discuss an opportunity for Transpro Motors to buy a bus that would be used by a “very big man.”

In no time, Transpro Motors was on board. On 30 November, three days after the meeting at Excon 2015, Viswam wrote to Lakshminarayan, “Kindly coordinate and release PO”—purchase order—“for the shell bus.” The email also revealed that Viswam had arranged for Volkswagen Finance to fund Transpro Motors. Viswam wrote, “As you are aware I had discussed with vwfs on the funding for the shell and other interiors which they are willing to do … We will support you with necessary brand guarantee for the same.” In the same email, Viswam marked a Volkswagen Finance official and directed him to “kindly expedite funding to our bangalore dealer for the bus which we discussed during Excon.”

That day, Transpro Motors issued a purchase order for a “Scania Metro Link HD 410 IB 6X2*4 14.50 Shell Bus” for a sum of Rs 1.2 crore. At 7.37 pm the same day, Scania issued a bill of sale for the same bus and amount. The GIA’s report noted, “The transaction has been recorded in Scania India’s General Ledger, reporting a net profit of approximately 400,000 INR.” The audit report further notes that the “payment for this customer invoice has been recorded on 21 September 2016, 10 ½ months after the customer invoice was submitted to Transpro.”

The GIA was unable to find any customer sale agreement between the companies, and that marked the first of several irregularities in the various financial transactions surrounding the bus. Primarily, these concerned the role of the Gadkaris in clearing the invoice issued by DC Designs, the loans issued to Transpro Motors and the rental agreement between Transpro Motors and Sudarshan Hospitality. These transactions also saw Sarang Gadkari, who had so far only received communications about the bus, send messages to Viswam.

On 24 December 2015, Viswam emailed Sarang on his personal email address with a final layout of the bus, titled, “Scania Proposal 8.” According to the layout, the bus would be fitted with an Asus media player, three TV sets—a 40-inch Sony, a 29-inch Sony and a Carbon TV—an Electrolux refrigerator, an IFB microwave oven, a Café Coffee Day coffee maker, an Asus or Sony amplifier, a wash basin, a cordless mic, a call-bell switch, mobile charging points, inverters, CCTV cameras, a WiFi system, a pantry, a wardrobe with a full-length mirror and a chemical toilet, among other fittings. “Request your approval,” Viswam wrote to Sarang.

The GIA report reveals that the interior design work for the bus was awarded to Dilip Chhabria Design Private Limited, and the exterior body work was given to SM Kannappa Private Limited. On 5 March 2016, Viswam emailed Sarang photos of different “interior styling options” and wrote, “Request your advise.” A few days later, he forwarded Sarang an email from the DC Design official. The official had written, “Kindly provide us with the scope of work you currently desire to carry out on the interiors to enable us send you a revised quote.” He had also attached a previous quote, dated 13 October 2015, for a “Scania 14.5 mts ready bus with air condition system (to be provided by client).” The quote contained several of the same fittings mentioned by Viswam in his December 2015 email to Sarang. The total amount quoted was a whopping Rs 1.45 crore—the toilet cubicle alone cost Rs 14.35 lakh.

By June 2016, issues of payment began to take centre stage. On 1 June, one Scania India official emailed Viswam stating, “As per the recommendation and direction of Mr. Anders Grundströmer we had invoiced One Scanio Metrolink HD 14.5 m bus to M/S Transpro Motors Pvt Ltd to be used for Nagpur and the same was sent to S M Kannappa Automobiles (P) Ltd for Interior finishing, Floor alteration, toilet & pantry fitment.” The email further stated that after modifications by Kannappa Automobiles, the bus would then “be sent to DC Designs further for final interior designing.” The payment terms quoted a total amount of Rs 22.19 lakh, and stated that the same had to be financed by Volkswagen Finance.

Later that week, an email thread among Scania India officials discussed the movement of the Metrolink to the DC Design office in Pune, with the subject, “Nagpur Bus movement.” On 7 June, Viswam wrote to the CFO Fromholz , Mikael Benje, Grundströmer’s successor as CEO, among others, emphasising that it was an important deal. “This is going to be a very important stake holder the details of which are known to Mikael Benje,” Viswam said. “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 last few months which is in final stages now. Mikael we discussed on this. The bus has to move on priority to DC for final work.”

Fromholz replied, “I would like to have a time plan and status regarding when we can expect to get paid from Transpro. Before shifting the location, please send me the time plan.” In response, Viswam informed him that DC Design would take two months to complete the interiors, and once the “bus would be ready for delivery,” Volkswagen Finance would “release the full payment including modification costs.” He added, “Request our support to Transpro till then.”

On 9 June, a Scania official sanctioned the movement of the bus. Grundströmer, Fromholz and Benje did not respond to emailed queries.

On 16 June, Sarang Gadkari messaged Viswam, “Sir please call me when u r free.” Two days later, Viswam messaged the DC Design official, “trying to reach you can you call me back Mr.Sarang wants to visit Pune tomorrow can you make it.” A little while later, he messaged Sarang to say that the official “has not reverted.” It is unclear from the correspondence if Sarang did visit DC Design’s Pune office, but if he did, it would have been at least his second visit in relation to the bus.

Soon after, Sarang began inquiring about the status of the bus on record. On 1 July, he messaged Viswam on WhatsApp, “Sir any update???” Within half an hour, Viswam replied, “Sirji negotiations are on.” Eight days later, the DC Design official emailed the “final quote towards interior customisation of Scania bus,” but not to Transpro Motors, the company that had officially bought the bus—the DC Design official emailed Sarang directly. He wrote that the quote was “as per the interaction with you and Mr. Sivakumar today morning.”

The quote was also significantly lower than the one previously given in October 2015. The DC Designs invoice attached in the email left the column for the total amount empty, but mentioned three figures—Rs 34.35 lakh for the “interior lounge section,” Rs 5.38 lakh for “existing seating in leather,” and Rs 27.74 lakh for “additional scope,” amounting to Rs 67.47 lakh. Perhaps a reference to the reduced amount, the DC Designs official added in his email to Sarang, “We would request you to kindly treat this offer as an exception rather than a precedent.”

Within 24 hours, Sivakumar replied marking Sarang on the email, confirming that DC Designs could “go ahead with the specifications finalised by you as per the scope document you had discussed with Mr.Sarang and start the work.” He added the purchase order “will be issued by the buyer / operating company”—referring to Transpro Motors. “Accordingly the funding will be organised,” Viswam said. On 15 July, Lakshminarayan emailed his written approval to the DC Design final quote.

The correspondence between DC Designs, Scania and Sarang shows, as recorded by the GIA in its final findings, that “the design of the bus was done at the request of, and in coordination with, Mr. Sarang Gadkari.” DC Designs did not respond to queries emailed to them.

With the body modifications on the Metrolink conducted and the bus in the DC Design workshop for the interior designing, it appeared that the time had come for the Volkswagen Finance funding to come through. On 3 August, Volkswagen Finance sent Scania India a “Letter of Confirmation” of the loan to Transpro Motors. The letter noted three different loans—one of Rs 1.2 crore for the Metrolink shell bus, one of Rs 22.19 lakh for the body fabrication by Kannappa Automobiles, and the third for Rs 76.58 lakh for the interior work by DC Designs. The total loan amount was Rs 2.18 crore. The letter included a precondition that Scania India must provide a “100% Brand Guarantee for entire loan tenure,” implying that it would have to repay the loan amount if Transpro Motors failed to do so.

In The Caravan’s earlier piece on the Scania bus, the article noted that Transpro Motors’ financial filings on the ministry of corporate affairs website included a loan agreement for Rs 22.19 lakh with Volkswagen Finance. The agreement was executed on 20 August 2016, and recorded that it was for a “Scania 14.5m” with a chassis that matched the Metrolink HD chosen for the Gadkaris. The previous report had raised the question of the loan amount being conspicuously low for a Scania Metrolink—the documents scrutinised by the GIA reveal that this was just one of three loans, and the one granted for the additional bodywork.

The other two loan agreements are not uploaded on the MCA website, which could indicate that the loans were not registered. Section 77 of the Companies Act of 2013 makes it mandatory for every company to register all charges—which include such loans—with the MCA. All three loans are, however, reflected in Transpro Motors’ FY17 financial statement under the “current liabilities”—that is, liabilities for which payment is normally due within a year. The loan amounts in the filings correspond with the amounts mentioned in Volkswagen Finance’s letter of confirmation.

On 19 September 2016, Sarang messaged Viswam, “Sir any update.” Viswam replied, “Sir payment transfer in progress will be completed today.” According to the GIA’s report, on 21 September, Transpro Motors made a payment of Rs 1.19 crore to Scania India—Rs 51,000 less than the Rs 1.2 crore due for the shell bus. The GIA report and its attached documents do not explain the shortfall.

So far, the transactions and negotiations concerning the bus appeared to have proceeded smoothly, without any major hurdles. To recap, Scania India formally sold the Metrolink shell bus to Transpro Motors in its books in November 2015, the additional bodywork and interior design was conducted in mid 2016, and Volkswagen Finance issued the loan facilities to fund this entire transaction in August 2016. The next month, Scania India received the payment for the bus. As the GIA report shows, Nikhil Gadkari was involved in the first meeting with Lakshminarayan and Sarang Gadkari was involved in every step of the way since.

On 11 November 2016, Transpro Motors officially entered into a three-year rental contract for the Metrolink HD with a Nagpur-based customer, as had repeatedly been referred to in the correspondence. This Nagpur-based customer, however, was not anyone from the Gadkari family, but Sudarshan Hospitality Management Services Private Limited—a private company working in accommodation and food service. Till this point, Sudarshan Hospitality and its director Priyadarshan Vivek Pande had not appeared in any of the conversations related to the luxury bus examined by the GIA. Yet, the rental contract was with Sudarshan Hospitality, signed on its behalf by Pande. Lakshminarayan signed on behalf of Transpro Motors and Viswam signed as a witness.

It is at this stage that Sudarshan Hospitality entered the picture for the first time in the GIA report, as the company that rented the bus. The correspondence annexed by the GIA showed that this was always the plan for the bus, expressly stated in Scania India’s internal email thread from November 2015, in which Viswam had clarified that the bus would be a rental and there would be no order from Nitin Gadkari. The events that followed, however, suggested that the Gadkaris, Lakshminarayan, Viswam and Pande had different understandings of how the rental agreement would play out.

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Sudarshan Hospitality was incorporated on 9 June 2015, less than a week after the first discussion about the luxury bus began between Scania and the Gadkari family. As previously noted by The Caravan, there exist a dense network of companies connecting Sudarshan Hospitality to Manas Agro and Cian Agro—the two flagship companies of the Gadkari sons, helmed by Sarang and Nikhil, respectively. However, Sudarshan Hospitality’s finances, as reflected in its MCA filings, were dismal. The company recorded a negative net worth throughout, at its lowest in FY20—with its liabilities exceeding its assets by a sum of Rs 10.48 lakhs. It has also consistently incurred losses, barring in FY17.

That year—incidentally, the same year that it entered into the rental contract with Transpro Motors for the Scania Metrolink—Sudarshan Hospitality received an unsecured loan of Rs 35 lakh from Manas Agro, helmed by Sarang Gadkari. The Caravan’s earlier report noted that it was unclear why this loan was provided, but the communication attached to the GIA’s report provides an explanation.

According to the rental contract, Sudarshan Hospitality had to pay Transpro Motors a refundable security deposit of Rs 1.2 crore for the bus, and a rent of Rs 20,000 per month—amounting to a total rent of Rs 7.2 lakh. If TransPro Motors were not a front company for the Gadkaris, as noted by the GIA, it would be a poor business decision—to say the least—for it to rent out the bus at such a low cost. We spoke to two private transport operators, who wished to remain anonymous, about rental contracts for luxury buses. In a regular rental deal for a customised, brand new premium category bus, the rent would be in lakhs, they said. One of the bus dealers said that a monthly rent of Rs. 20,000 for a bus costing more than two crore is impossible. “We don’t charge this much even for a luxury car,” he said. Yet, this was the deal that was signed and sealed.

In its accounts, Sudarshan Hospitality represented the bus as a tangible asset worth Rs 33.57 lakh, reflected for the first time in its financial statement for FY17. It is unclear how the bus is reflected as an asset, given that it was taken on rent from Transpro Motors. The MCA documents, the GIA report and its annexures do not provide an explanation for this. The financial statements further record that the value of the asset depreciated by approximately 15 percent every year. In Sudarshan Hospitality’s FY18 balance sheet, the asset’s value was recorded as Rs 28.25 lakh, which fell to Rs 23.78 lakh by FY19. Once again, it is unclear how Sudarshan Hospitality determined these values.

An independent auditor’s report filed by Sudarshan Hospitality in FY19—the Companies Act of 2013 directs all companies to submit auditor’s reports with their financial statements every year—suggests that the bus was a poor transaction for Sudarshan Hospitality as well. The auditor noted that the bus was depreciating in value but brought no revenue. The report stated, “The company owns a bus and claims depreciation on the same while the revenue from transport is negligible.” In fact, the auditor goes further to question the transaction on record: “The transaction draws a suspicion regarding the authenticity and validity of the transaction. The explanation provided by the management was not found to be satisfactory.”

The auditor’s report does not mention what explanation the management had offered. We reached out to Sudarshan Hospitality and sent a detailed questionnaire regarding their role in the Scania bus deal and their links with the Gadkari family, but received no response.

Lakshminarayan appears to have had several concerns with Sudarshan Hospitality as well, which also led him to question his relationship with Scania India. According to an April 2017 email by Lakshminarayan to Viswam, Sudarshan Hospitality was supposed to pay the security deposit of Rs 1.2 crore in three instalments of Rs 40 lakh, each to be paid every month from November 2016 to January 2017, apart from the monthly rent. But as of April 2017, Lakshminarayan wrote, he had received a total of Rs 60 lakh from Sudarshan Hospitality. The communications accessed by the GIA show that even these payments were a result of consistent requests by Viswam—not to Pande, but to the Gadkaris.

The GIA report notes, “It appears that on 24 November 2016, Mr. Sarang Gadkari organized a transfer of funds to Transpro.” Three days earlier, the communications show a message from an unidentified person to Sarang, “kindly consider 30 Laks I would be obliged.” Sarang replies the next day, “100 % that will make done tomorrow.” On 23 November, the payment does not seem to have been made, for the unidentified person sends another message, “Sir payment not received in credit of Transpro he is quite struggling since his instalment is also due to financier kindly oblige.”

The message seemed to refer to Transpro Motor’s liability to Volkswagen Finance. According to the loan agreement between the companies, Transpro Motors had to pay Volkswagen Finance monthly instalments of Rs 2.04 lakh, Rs 1.30 lakh and Rs 37,550 for the three loans—a total of Rs 3.71 lakh per month. The message appears to have yielded results, for the next day, on 24 November, the unidentified person wrote, “Sir thanks to you payment credit received by Transpro.” But according to Transpro Motors’ ledger account, which was accessed by the GIA, Sudarshan Hospitality paid a sum of Rs 25 lakh on 23 November—not Rs 40 lakh as appeared to have been the understanding between Viswam and Lakshminarayan.

Lakshminarayan’s woes only increased, even leading him to threaten to terminate the agreement. At 10.47 pm on 30 December, he wrote to Viswam:

As our agreement, 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,, ,, This is breech 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,,Iam serious,,till 4th January 2017 , I will wait , then I will go with legal,,

Viswam replied at 11.59 pm:

Shall certainly inform them please send a mail to Sarang also copy to me. I will pursue with Sarang and Nikhil as well. I will forward this mail also to Sarang so that he knows the situation. Let’s take him on call today morning.

The next morning, Viswam messaged the Gadkari brothers at 6.40 am to wish them “A Happy and Prosperous New Year 2017.” On 2 January, at 10.44 am, he messaged 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.” The conversations that ensued that month are not recorded by the GIA, but the ledger account shows that Lakshminarayan received his next payment only on 17 February—a sum of Rs 10 lakh this time.

According to the email he later sent to Viswam in April, he should have received the full security deposit of Rs 1.2 crore plus the monthly rent of Rs 80,000—for four months—by this point. Instead, he had received Rs 35 lakh.

The same drama unfolded the next month, but Viswam appeared to have become more desperate for the Gadkaris to intervene. On 20 March 2017, he messaged Nikhil and even attached a photo of the terms and conditions of the rental contract. Viswam wrote, “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.”

Four days later, he wrote to Nikhil again: “Sir request your help financier has issued notice to lakshminarayan kindly help him with payment by tomorrow.”

On 28 March, Viswam messaged both Sarang and Nikhil, and implored them to help: “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 inspite of helping us.” Three days later, Lakshminarayan received Rs 25 lakh from Sudarshan Hospitality. The GIA’s final findings include the observation that “Sarang and Nikhil Gadkari organized the payments of INR 6 million for the bus to Transpro Motors.”

But by this point, Lakshminarayan appeared to have lost his patience. On the night of 10 April, he sent the email to Viswam detailing Sudarshan Hospitality’s failure to meet its commitments. In his email, Lakshminarayan also stated that Viswam had assured him a compensation of Rs 50 lakh, which would be paid “by giving Rs 50000 by extra commissions on and above the bus sold.” He noted that Scania India had failed to fulfil this commitment as well. “Nil from Scania,” he wrote. Lakshminarayan added:

Please convince me the deal of Nagpur is benificial to Transpromotors, taking consideration of all interest calculated,, If finance were happen on time we are not writing this mail, Iam feeling we are taking for granted, if your calculation different from me , please convince,,

The morning, several hours before receiving Lakshminarayan’s email, Sivakumar had messaged Nikhil seeking his “intervention” for “25 laks out of last months amount.” Once again, Viswam repeated, “Kindly oblige sir Lakshminarayan is tremendous financial stress since he has borrowed for the bus.” But in his reply to Lakshminarayan’s email, Viswam adopted a different tone and wrote, “Whatever was done by you with the full involvement. Any queries can be addressed any time. I think you have not been taken for granted any time.”

On 20 April, Transpro Motors received Rs 12 lakh from another private company, Travel Time Car Rental Private Limited, followed by another sum of Rs 3 lakh received on 24 April. The other internal audit conducted by Scania AB mentions that Travel Time is a former Scania India bus dealer based in Pune, similar to Transpro in Bengaluru. The GIA’s report notes, “According to Mr. Lakshminarayan, this payment concerned financial support for the bus, but was recorded in Transpro’s books as payment for services.”

We contacted Travel Time regarding the money to Transpro Motors. “We are rather surprised to see that Scania has involved our name in their wrongdoings (if any),” Vivek Kalkar, a directors at the company, replied. “We have never benefitted anything from of 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.” Transpro Motors’ MCA filings provide an explanation for Kalkar’s apparent outrage.

Its FY17 financial statement records a sum of Rs 60 lakh received from Sudarshan Hospitality—this corresponds to the three instalments of payments received by Lakshminarayan. Pertinently, in its FY18 financial statement, Transpro Motors records a security deposit of Rs 75 lakh from Sudarshan Hospitality. While this corresponds with the money received from Sudarshan Hospitality and Time Travel combined, it is unclear why the amount received from Time Travel appears to be recorded as a security deposit from Sudarshan Hospitality.

The GIA report does not clarify how or whether Lakshminarayan’s concerns were addressed, but it appeared that he did not pull out of the agreement. Yet, Viswam was once again forced to reach out to the Gadkari family to help Lakshminarayan. On 1 December 2017, he messaged Nikhil, who assured him that “till 15 dec all payments are done.” But on 26 December, Viswam messaged Nikhil again:

The dealer is under tremendous stress and not settled three instalments to VW finance. 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

The pleadings fell on deaf ears, and according to the GIA’s report, Transpro Motors did not pay any monthly instalment after November 2017. Eventually, Volkswagen Finance invoked the guarantee offered by Scania India on the loans. In October 2018, Volkswagen Finance wrote to a Scania India official to inform him Transpro Motors had defaulted to pay the instalments on the loan agreements, and had been held to be a non-performing asset. The letter noted that Volkswagen Finance’s efforts to recover the amount had not “yielded desired results for long” and called upon Scania India to “remit INR Rs 22,195,991.55”—a whopping sum of Rs 2.21 crore that was outstanding.

Hans-Åke Danielsson, Scania’s press manager and senior advisor, told us that Scania India did reimburse Volkswagen Finance for the whole amount.

*

After the SVT report —jointly investigated with the organisations ZDF and Confluence Media, from Germany and India, respectively—broke, the Indian Express quoted a Scania spokesperson and stated that “the company denied sending any bus to Gadkari for personal use.” According to the Indian Express report, Danielsson said, “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 have no information about the current status of the bus.” The Express report further noted that Danielsson “denied engaging in any business deal with any (person/company) connected with Gadkari’s sons.”

Within hours of the story being published online, Nitin Gadkari’s office tweeted a denial of the SVT report, heavily quoting from the Express story. We asked Danielsson about his quotes.

He said that the direct quote was accurate, but added that the Indian Express’s interpretation of it “does appear to be slightly misleading, since both you and I know that the bus company that rented the bus from Transpro was run by a close relative.” Danielsson said he felt that the answer quoted in the Express story “tries to hide the fact that one of the minister’s sons has ‘rented’ the bus, which we have been able to establish.” He added, “We also know that 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 the transport at the party.” But Danielsson clarified that Scania had not been “able to prove that the minister received the bus as a gift.”

Danielsson is not the only one from Scania who has spoken about the minister’s link to the bus. On 26 February 2021, before the SVT story was published, Scania’s CEO Henrik Henriksson gave a video interview to the Swedish public broadcaster and reiterated the internal audit’s findings. “This was a deal that should never have been done,” Henriksson said. “And it is a deal where we have sold a bus to one of our private dealers, and they in their turn then sold it to a transport company that has personal connections, family connections to a minister in India.” He continued, “Our system should have picked it up, and warning bells should have been signalled to us. 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.”

Henriksson sought to lay the blame squarely on the Scania India officials involved in the negotiations. “They evaded our rules that we had set up, documentation was missing and they had tried to avoid informing us,” he said. Henriksson added that as soon as Scania AB, in Sweden, learnt about the transactions, it terminated the employment of the individuals it deemed guilty, and shut down its bus-manufacturing unit in Narsapura, near Bengaluru.

But the truth appears to be slightly different. Scania India’s Narsapura factory was shut down in June 2018, and media reports from the time indicate that it was a result of low demand and poor sales. The official statement by the company noted, “Due to lack of demand in the premium bus segment in India, Scania is restructuring its bus manufacturing business in India and is forced to close down its in-house production of bus bodies in the Narasapura premises.” Two former Scania bus agents in India also told us, on the condition of anonymity, that the factory was closed down due to poor sales.

Henriksson’s claims about action against the erring officials also demands further scrutiny.  The former sales director, Viswam, left Scania India in March 2018, more than six months before GIA findings concluded. According to his LinkedIn profile, in March 2018, Viswam joined MG Group, which had a contract with Scania to produce bus coaches, as the chief marketing officer, and has been working there since. Two former Scania employees stated that Viswam’s employment was not terminated, and that he resigned with a fat sign-off package.

We made multiple efforts to contact Sivakumar Viswam. He refused to meet in person, and when contacted over the phone, he said he had left Scania many years ago and would not like to comment on the matter. He did not respond to the detailed questionnaires sent multiple times.

We also met Lakshminarayan in Bengaluru, but he refused to comment. He told us that Transpro Motors had folded its business in Karnataka and handed over its factory to Scania. When The Caravan’s reporter visited Transpro Motors’ registered address in Bengaluru earlier this month for the previous report, a Scania office stood in its place.

Nitin Gadkari and his personal secretaries at the road-transport ministry did not respond to four emails seeking an interview and containing detailed questionnaires. We also approached the Indian embassy in Germany to forward the letter with questions to the minister, but received no reply on that channel either. Detailed questionnaires to Sarang and Nikhil Gadkari also went unanswered.

*

It is unclear where the bus is at present. Its registration certificate, as accessible on Vahan—the road-transport ministry’s digitised database—still records Transpro Motors as its owner .

The MCA filings of Transpro Motors and Sudarshan Hospitality indicated that Volkswagen Finance had seized the bus. Sudarshan Hospitality’s balance sheet for FY20 indicates that the bus was no longer an asset held by the company. Its auditor’s report from that year notes that an asset was “taken over by the financial institution due to default in repayment of loan during the financial year ended March 31, 2020.” Correspondingly, the audit report filed by Transpro Motors that same year indicates that Volkswagen Finance seized the bus because “the company has defaulted in repayment of dues to its bank & financial institute.” Against the entry for all three loans with Volkswagen Finance, the financial statement recorded, “Vehicle is Seized and Loan Settled.”

But Volkswagen Financial Services AG—the Germany-based parent company of Volkswagen Finance Private Limited—did not answer questions about the bus’s current location. A company official also stated that it was not aware of the Gadkaris involvement in the deal. The company did claim to have repossessed the bus in March 2019. When contacted with the same queries, officials at Volkswagen Finance did not respond.

On the other hand, Danielsson offered almost contradictory answers to the question. In one emailed reply, he said that the bus was repossessed by the finance company in October 2019, which is corroborated by the FY20 financial statements filed by Sudarshan Hospitality and Transpro Motors. Volkswagen Finance did not respond to queries seeking clarifications about the claim that the bus was repossessed in March 2019.

In another email, he stated that the bus may have been sold or rented out by Transpro Motors to another Nagpur-based private company called Ayodhya Commerce Private Limited. “A company that is also connected to the minister,” Danielsson added, but he did not respond to emails asking him to elaborate on the connection.

He said that the documents provided to Scania by Volkswagen Finance indicated that the bus had been sold to Ayodhya Commerce, “but there was no sales contract.” He added that there would have been no mention of this in the GIA report because Volkswagen Finance claimed to have sold the bus in October 2019. “But we have not seen evidence of this,” he emphasised. In another email, Danielsson speculated, “Given that Transpro Motors is still the owner of the bus, one gets the impression that Ayodhya Commerce had also rented the bus from the dealer.”

Ayodhya Commerce did not respond to queries.

The Swedish public-broadcaster SVT assisted in the reporting of this story.