Devas Multimedia, a Bengaluru-based start-up which is being investigated by the CBI and Enforcement Directorate for causing losses to the Indian Space Research Organisation through the 2005 Devas-Antrix deal, moved funds to the tune of Rs 68.78 crore to a US subsidiary in 2008 and 2009, according to the company’s annual report for 2009-10.
The transfer of funds from Devas Multimedia’s India entity to the US entity is one of the aspects that is being investigated by the CBI in the Antrix-Devas deal.
The CBI alleged in a March 2015 FIR that Devas Multimedia siphoned off funds from India to a subsidiary incorporated in the US and that “a substantial part of wrongful gain was remitted to this new company”.
An investment of Rs 58.78 crore by Devas Multimedia in its wholly owned subsidiary Devas Multimedia America Inc in 2009-10 and an investment of Rs 9.99 crore in 2008-09 was reported by Devas Multimedia in its annual report in 2010. “During the year the company has invested $12,500,000 (Rs 587,850,000), previous year $2,000,000 (Rs 99,980,000) in the common stock of its wholly owned subsidiary Devas Multimedia America Inc (DMAI). In consideration of the investment DMAI has allotted 3,125 shares (previous year 500 shares) of common stock to the company,’’ states Devas Multimedia’s 2010 annual report.
The CBI on Thursday filed a chargesheet against four officials of Devas Multimedia, including its US-based CEO and president Ramachandran Viswanathan, and four former officials from ISRO and its commercial arm Antrix Corporation, including former ISRO chairman G Madhavan Nair, for criminal conspiracy, cheating and corruption through the 2005 Devas-Antrix deal. The eight officials have been accused of “being party to a criminal conspiracy with an intent to cause undue gain to themselves or others by abusing official positions’’.
The eight persons have been accused by the CBI of causing a loss of approximately Rs 578 crore to the Indian government through the 2005 deal, where ISRO was to lease two communication satellites for 12 years at a cost of Rs 167 crore to Devas Multimedia. The start-up firm was to provide multimedia services to mobile platforms in India using the space band or S-band spectrum transponders on ISRO’s GSAT 6 and 6A satellites built at a cost of Rs 766 crore.
The 2005 Devas Multimedia-Antrix Corporation agreement was annulled by the UPA government in February 2011 citing usage of the S-band spectrum for security purposes. The deal was annulled through a decision of the Cabinet Committee on Security amid the 2G scandal after questions were raised over 70 Mhz of S-band spectrum worth crores being handed at a low cost to a firm started in 2003 by a few former ISRO officials.
After the NDA government came to power in 2014, the CBI was asked to investigate the Antrix-Devas “sweetheart” deal. In March 2015, the CBI registered a corruption case against Antrix and Devas officials stating, among other things, that FDI funds were diverted to a US-based entity.