Devas-Antrix deal: ED serves summons to US-based executive

The ED informed a special court in Bengaluru about the serving of summons on Ramachandran Vishwanathan, Founder CEO of Devas Multimedia, and Devas Multimedia America Inc (DMAI), the US subsidiary.

In September this year, the special court rejected a plea by the ED to split the trial into two — one against eight accused who have been served summons and another against those who are unavailable — Vishwanathan and Devas Multimedia America Inc. in this case.

The ED chargesheet was filed in July 2018. Among the other accused are several Devas officials, three subsidiaries of the firm and a former executive director of the Antrix Corporation – a commercial arm of the state-run Indian Space Research Organization.

The chargesheet, filed under the Prevention of Money Laundering Act, alleged that Devas Multimedia transferred 85 per cent of Rs 579 crore of foreign funding it received through a 2005 deal with ISRO to the US under various claims.

Under the deal, ISRO was contracted to lease two communication satellites for 12 years at a cost of Rs 167 crore to Devas Multimedia. The start-up was to provide video-audio services to mobile platforms in India using the space band or S-band spectrum transponders on ISRO’s GSAT 6 and 6A satellites
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The Devas Multimedia-Antrix Corporation (ISRO) agreement was annulled by the Manmohan Singh-led UPA government in February 2011 following allegations of the contract being a ‘sweetheart deal’ against the backdrop of the 2G scam in the telecom sector.

When the NDA government came to power in 2014, the CBI and ED were asked to investigate the deal. The CBI filed its chargesheet in 2016 against Devas, Antrix and former ISRO officials over the failed deal.

In a statement while attaching Rs 79.76 crore worth of Devas Multimedia assets in India in 2017, the ED said, “The main purpose of entering the agreement with ISRO/ACL was to raise foreign investments on the strength of the agreement with ISRO and thereafter siphon off the investment raised, out of India in the guise of investment in subsidiary company, business support services and legal fee.”

After the cancellation of the 2005 deal, foreign investors in Devas Multimedia — German telecom major Deutsche Telekom, three Mauritius-based foreign investors, and Devas Multimedia approached various international tribunals seeking damages for the failed deal.

Incidentally, the National Company Law Tribunal in India ordered the liquidation of Devas Multimedia on May 25 following a plea by Antrix Corporation that a fraud was perpetrated in the creation of the start-up.