U.S. Dealers Sue Mahindra For Conspiracy And Fraud

June 6, 2012
2006 Mahindra Scorpio

2006 Mahindra Scorpio

Things seemed to be going so well for Mahindra. The company -- known to Americans for its tractors and commercial vehicles -- was finally gearing up to launch its family of pickup trucks and SUVs in the U.S. Mahindra had received regulatory approvals, and it even had a Georgia importer lined up to distribute and sell the vehicles, which many thought would be attractive to small-truck shoppers.

But then things went south. The importer -- Global Vehicles -- sued Mahindra for not delivering vehicles on schedule, and in turn, Mahindra tried to dump Global, focusing its efforts on dealers.

Now, those dealers are suing Mahindra, too. In U.S. District Court in Atlanta, dealers from California, Florida, New HampshireNew Jersey, and Washington filed a lawsuit accusing Mahindra of conspiracy, fraud, and misrepresentation.

The plaintiffs allege that they paid dealership fees, hired new personnel, constructed showrooms for Mahindra vehicles, and developed marketing campaigns to publicize those vehicles -- all at Mahindra's insistence. The lawsuit also claims that Mahindra has made off with over $60 million in cash and trade secrets since 2007.

This news comes by way of a press release from the dealers' legal team, the Miami-based firm of Diaz Reus & Targ, so we don't have a full picture of the evidence in the case. In particular, we're unsure what documentation existed between Mahindra and plaintiffs and how solid their standing will be in court. 

However, our purely objective legal assessment (based on years of watching Law and Order and Judge Judy) is that Mahindra's been a little flaky in its dealings with U.S. corporations. For a start-up to behave that way would be one thing, but a court may look very differently on a company that already has substantial facilities and business in the U.S., as Mahindra does with its farm and commercial equipment line.

Then again, Mahindra recently won its arbitration case against Global Vehicles in a British court, so, who's to say?

Our powers of clairvoyance are pretty limited these days, but if you're one of those folks hoping to get your hands on a Mahindra pickup, we wouldn't suggest holding your breath.

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