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Thursday, March 04, 2021

Govt moves to wind up Devas, $1.2 bn award still pending

In a notification issued Monday, the MCA has authorised Rakesh Sasibhushan, Chairman-cum-Managing Director, Antrix, to present the petition on the grounds specified under clause (c) of Sub-section (1) of Section 271 of the Companies Act.

Written by Aashish Aryan , Karunjit Singh , Johnson TA | Bengaluru, New Delhi |
January 19, 2021 5:23:24 am
Antrix-Devas deal, NCLT, National Company Law Tribunal, Devas, ISRO, Antrix Corporation, Indian express newsA government official, who did not wish to be named, said Antrix Corporation itself sought the authorisation to file a petition for winding up of Devas. He, however, did not mention if Devas was provided an opportunity to be heard.

Almost three months after a federal court in the US ordered ISRO’s commercial arm Antrix Corporation Ltd to pay $1.2 billion to Bengaluru start-up Devas Multimedia Private Ltd, the Ministry of Corporate Affairs has authorised Antrix to move a petition before the National Company Law Tribunal (NCLT) for winding up of Devas.

In a notification issued Monday, the MCA has authorised Rakesh Sasibhushan, Chairman-cum-Managing Director, Antrix, to present the petition on the grounds specified under clause (c) of Sub-section (1) of Section 271 of the Companies Act.

The clause states that a company can be wound up if NCLT, based on an application by a Centre-authorised person, is of the opinion it was set up for fraudulent and unlawful purposes, or if persons concerned in its formation or management were guilty of fraud, misfeasance or misconduct, or if its affairs were conducted in a fraudulent manner.

A government official, who did not wish to be named, said Antrix Corporation itself sought the authorisation to file a petition for winding up of Devas. He, however, did not mention if Devas was provided an opportunity to be heard.

On October 27, 2020, a federal court in the US had confirmed a $1.2 billion compensation awarded to Devas by an arbitration tribunal of the International Chamber of Commerce over the cancelation of a January 2005 agreement between Antrix and Devas to build and launch two satellites to provide multimedia services via the S-band spectrum. The Supreme Court of India had in November, until further orders, kept in abeyance the implementation of the US federal court order.

The January 28, 2005, Devas-Antrix agreement was annulled by the Congress-led UPA government in February 2011 in the backdrop of the 2G scam and allegations of a sweetheart deal in the allocation of S-band spectrum to Devas, a fledgling firm. The S-band spectrum allocated for the S-band satellites to be used by Devas was needed for military purposes, the government had said.

After the BJP-led NDA came to power in 2014, it asked the Central Bureau of Investigation to probe the 2005 Devas-Antrix agreement. In August 2016, the agency filed a chargesheet against eight officials from Devas, ISRO and Antrix, for “being party to a criminal conspiracy with an intent to cause undue gain to themselves or others by abusing official positions”.

Among the eight persons chargesheeted by the CBI is former ISRO Chairman G Madhavan Nair. The CBI has also accused former ISRO officials and Devas of causing a loss of approximately Rs 578 crore to the Indian government.

The Directorate of Enforcement (ED) under the Ministry of Finance has filed a charge sheet under the Prevention of Money Laundering Act against a former Managing Director of Antrix and five Devas officials. The ED has stated Devas transferred 85 per cent of the Rs 579 crore foreign funding it received on the back of the 2005 deal to the US under various claims.

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