Mahindra Refutes Charges as US Auto Dealers Sue for Fraud, Conspiracy

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Atlanta – Indian auto giant Mahindra reacted with a statement on its website refusing to comment on the reports of numerous US auto dealers filing a suit against them, claiming the subject was sub judice.

Referencing the claims filed by Diaz Reus and Targ which represents US automobile dealers in a suit in Atlanta, Georgia against “Mahindra & Mahindra Ltd. and Mahindra USA Inc,” the company said, “We cannot comment on this as the matter is in the courts but we would like to state that some dealers had earlier filed a suit against Mahindra and Global Vehicles in the US District Court in Missouri.”

“The Missouri Court dismissed all claims against Mahindra in that suit. Significantly, the Missouri Court also ruled that Mahindra could not be held liable for any action of Global Vehicles with respect to its dealers,” the Indian company stated.

Denying all allegations of “fraud, misrepresentation and conspiracy,” Mahindra cited an International Arbitral tribunal dismissing in February 2012 “similar allegations and claims against Mahindra made by Global Vehicles.”

Earlier, Michael Diaz, the managing partner of Miami-based Diaz Reus & Targ, said in a statement, “Mahindra told the dealers that its light trucks and SUVs were ready for delivery to the US market,” adding, “However, Mahindra intentionally delayed certification of its vehicles after obtaining the dealership fees and trade secrets, and began pursuing other partners in the US and elsewhere in clear violation of their commitments.”

The lawsuit alleged that Mahindra duped hundreds of US auto dealers and walked away with more than $60 million in cash and trade secrets. Mahindra then simply reneged on its promises, according to attorney Diaz.

“Mahindra repeatedly failed to live up to its obligations,” Diaz alleged, saying, “Now, after spending millions of dollars on behalf of Mahindra, the US dealers have nothing to show for their time and energy other than a series of false promises.”

“Through their false representations, the defendants lured the US dealers into making investments and promoting Mahindra’s brand name,” said Diaz, adding, “Mahindra is going to learn that trying to outsmart the dealers was a serious mistake, as we will aggressively seek justice for our clients.”

The mass tort lawsuit was filed in US District Court in Atlanta on June 4, 2012 against Mahindra & Mahindra, Ltd, and Mahindra USA, Inc. by dealerships in New Hampshire, Florida, California, New Jersey, and Washington.

Dealers across the country paid initial dealership fees, undertook marketing on Mahindra’s behalf, built Mahindra showrooms, display platforms and showcases, and hired additional personnel, all at Mahindra’s urging, according to the lawsuit. (IATNS)

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