Five U.S. dealers suing Mahindra for cheating them out of millions of dollars

Article by Christian Andrei, on June 10, 2012

Five U.S. dealers are suing Mahindra & Mahindra Ltd. in federal court for supposedly conning them and cheating them out of millions of dollars. They claim that Mahindra tricked them with regards to its grand plans to begin the sales of pickups and an SUV in the U.S. market. The lawsuit was filed in the U.S. District Court in Atlanta last Monday.

The lawsuit claims that Mahindra got over $9.5 million in fees and more than $100 million in trade secrets to be able to enter the U.S. market.

The dealers are also claiming that they paid initial dealership fees as well as launch promotional campaigns, built showrooms, platforms and showcases, and created more jobs – all on behalf of Mahindra. Carlos Gonzalez of Miami, a lawyer who represented the dealers, said that they found out through their probe that Mahindra deceived the dealers in many ways.

The five dealers who filed the lawsuit are Holloway Buick GMC from New Hampshire; Crown Global LLC from Florida; Elk Grove Toyota from California; Mauro Motors Inc. from New Jersey; and One World Armada of Bellevue Inc. who hails from Washington.

Gonzalez said that more dealers are expected to join the claim. Mahindra released a statement to say that it is “unequivocally” denying all claims of fraud, misrepresentation and conspiracy.

Mahindra cited a ruling last March in Missouri, where a federal judge dismissed a separate suit that dealers filed. The reason cited by U.S. District Judge Rodney Sippel for dismissing the case was that the court didn't have jurisdiction over Mahindra in Missouri.

This ruling didn’t have any resolutions related to the case’s substantive issues. The suit filed in Atlanta stated that Mahindra started planning a U.S. dealer network in 2004. Independent distributor Global Vehicles U.S.A Inc. was chosen to enter a deal with Mahindra to import and be its exclusive distributor to almost 350 dealers in the U.S. [source: Autonews]

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