Monday, July 4 2005 17:39 Hrs (IST) - World Time -

Frankfurt: The bribery scandal at German auto giant Volkswagen has led chairman Bernd Pischetsrieder to postpone making a decision on the planned construction of a new factory in India, the business daily 'Handelsblatt' reported today.

Pischetsrieder has put the building plans on ice until the allegations of bribes in connection with the construction of the plant have been cleared up, the newspaper said, quoting sources close to suppliers.

The regional Berlin daily 'Tagesspiegel' reported that the planned construction of an assembly plant in Angola had also been put on ice in the wake of the scandal. Both newspapers said VW had declined to comment on the information.

VW is hiring independent auditors KPMG to review the situation. Schuster last month quit amid allegations he took bribes from potential suppliers and claims in magazine reports that the used camoflage companies to secure lucrative VW contracts abroad, notably India and Angola.

But the scandal looked set to widen last week when the long-serving head of VW's general works council, Klaus Volkert, also announced, he was stepping down nine months earlier than planned. AFP