NEW DELHI -- An Indian court has ordered the arrest of a former Volkswagen manager accused of defrauding a southern state government, a federal police spokesman said on Wednesday.
"An arrest warrant has been issued against (Helmuth) Schuster by a court in Hyderabad," said the Central Bureau of Investigation spokesman.
In July, Volkswagen paid nearly 2 million euros ($2.4 million) to the Andhra Pradesh government as compensation over the scandal.
The state government said it was informed by Schuster in January that Volkswagen would set up a 51 percent-owned unit to build cars in the eastern coastal city of Visakhapatnam.
He asked the government to take a nominal equity position in the firm.
The government released 2 million euros for equity capital in Vashishta Wahan, which Schuster said was the new company formed exclusively to implement the car project.
But Volkswagen said it had never held a stake in the firm and had never given the go-ahead for the project.
Volkswagen assembles Skoda Octavia compacts and Superb mid-size models from kits at a plant at Aurangabad, in the western Indian state of Maharashtra.