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Wednesday, September 22, 2021

NCLAT upholds NCLT order to wind up Devas Multimedia

Earlier, the NCLT Bengaluru bench had ordered winding up of Devas Multimedia on a petition filed by the Ministry of Corporate Affairs. It had observed that Devas was only incorporated to collude with the then officials in order to “bring money into India and to divert it under dubious methods to foreign countries”.

By: ENS Economic Bureau | New Delhi |
September 9, 2021 3:01:24 am
The Devas Multimedia-Antrix Corp agreement was cancelled by the then UPA government in 2011 after allegations of the deal being a quid pro quo “sweetheart deal” were raised. In 2014, the Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) were asked to probe the deal.

The National Company Law Appellate Tribunal (NCLAT) has upheld an order of the Bengaluru bench of the National Company Law Tribunal (NCLT) to wind up Devas Multimedia Private.

In its order, the NCLAT said that Devas, which the NCLT had said was incorporated “with fraudulent motive and unlawful object to collude and connive with then officials of Antrix and to misuse/ abuse process of law”, did not have the either the technology, or the licences and the government approvals to execute the agreement they had signed in 2005.

“The fact that fraud has been committed is apparent on the face of every record available before this Tribunal. A trial would indicate who was responsible for committing the fraud with which this Tribunal is not concerned,” the NCLAT said in its order.

Earlier, the NCLT Bengaluru bench had ordered winding up of Devas Multimedia on a petition filed by the Ministry of Corporate Affairs. It had observed that Devas was only incorporated to collude with the then officials in order to “bring money into India and to divert it under dubious methods to foreign countries”.

The Devas Multimedia-Antrix Corp agreement was cancelled by the then UPA government in 2011 after allegations of the deal being a quid pro quo “sweetheart deal” were raised. In 2014, the Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) were asked to probe the deal.

Signed in 2005, the deal allowed ISRO to lease two communication satellites to Devas for 12 years for Rs 167 crore. Devas, which then was a startup incorporated just for the purpose, was to provide audio-video services to mobile platforms in India using the space or S-band on ISRO’s GSAT 6 and 6A satellites.

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