According to North Zone DCP R Jaya Lakshmi, the case was referred by a court, based on a complaint filed in 2010, and BMW India Financial Services Private Limited's Managing Director Stefan Schlipf was arrested in this connection.
"We arrested him following the due procedure. He was produced before a court and remanded," the police official said.
According to the court remand report, Schlipf was arrested yesterday in Gurgaon and brought to Hyderabad on a transit remand.
Reports indicate that BMW India, which is represented by its President and Managing Director is the prime accused in the case, while Schlipf is accused number 6.
Meanwhile, BMW issued a statement today which condemned the arrest of its executive.
"BMW Group India has raised a strong objection to the arrest of Schlipf with the authorities. Schlipf was not present in India during the period of dispute. The company considers this incident as completely unacceptable.
"As one of the most reputed global companies, the BMW Group has very strict compliance guidelines and processes. BMW Group India or any of its directors have not engaged in any wrongdoings and the company will take necessary legal action," BMW said in its statement.
The case pertains to Delta Cars Private Limited, which was a BMW dealer in Hyderabad from June 2007 to December 2009. The dealership agreement expired on 31 December 2009, in the absence of a further term renewal.
As a result, Delta Cars filed lawsuits in 2010 against BMW India Private Limited, the car maker said.
In its complaint, Delta Cars alleged that it incurred losses due to pressure of excess supply of cars, which ultimately resulted in a heavy interest burden, leading to financial losses.
Stefan Schlipf was appointed Managing Director of BMW India Financial Services Private Limited on 14 April 2013. During the period of allegations, between 2007 and 2009, Schlipf was employed in BMW Bank GmbH and was based out of Munich, the BMW statement said.
Schlipf was not present in India during the period of dispute with Delta Cars and until yesterday, Schlipf has never been accused in the lawsuit, the BMW statement said.