The CBI has filed a charge sheet against former ISRO chairman G Madhavan Nair, Devas Multimedia a Bangalore based satellite communications company, and top executives of ISRO’s commercial arm Antrix Corporation for allegedly causing losses of Rs 578 core to the government exchequer.
Devas was supposed to develop a project to launch satellite-based multimedia services (including video, audio) via mobile phones and broadcasting mediums in India using the rare S-band spectrum. The project was meant to broadcast TV signals and mobile signals without the use of costly mobile towers and equipment, mostly for use in rural areas. The future of the project is now uncertain.
The CBI report added that during 2004 to 2011 the executive director of Antrix was involved in criminal conspiracy along with advisors of a US-based company. The two parties allegedly violated government guidelines in providing rights to Bangalore-based Devas Multimedia for delivery of video, multimedia and information services to mobile receivers in vehicles and mobile phones via the S-band spectrum. The spectrum was to be beamed through ISRO’s GSAT-6 and GSAT-6A satellites.
Note that his kind of mobile services using S-band spectrum is already live in China since 2007 and it has launched government owned Mobile TV services to its citizens successfully using this rare spectrum. More here.
A timeline of events leading to CBI intervention
A part of the following timeline has been aggregated from an Indian Express report from October 2015.
In 2005: ISRO’s Antrix Corporation inked a deal with Bangalore-based Devas Multimedia through a 12-year lease of 70MHz of the rare S-band spectrum. The spectrum was to be provided via two yet to be launched satellites. ISRO owns a total of 150MHz of S-band spectrum. Devas which was also headed by former ISRO scientists had to pay $300 million in total to Antrix in a 12-year period.
October 2009-June 2010: The report added that after the retirement of G Madhavan Nair as chariman of ISRO in October 2009, the agreement was disclosed in public by June 2010, while ISRO appointed an internal committee to review the deal with Devas and Antrix.
July 2010: ISRO committee decides to cancel the agreement with Devas stating that the S-band was a scare spectrum and could be put to military or other strategic purposes.
February 2011: A Hindu report echoed findings of a draft CAG audit report that claimed irregularities, financial fraud, non-compliance to guidelines, and favoritism in the Devas-Antrix deal. This was around the same time that the 2G scam was making its round in the news.
May 2011: Another independent Government body steps in to examine the deal, while Devas Multimedia files a suit against the government and ISRO in an International Arbitration Court seeking damages for annulling the agreement.
January 2013- February 2013: Ex ISRO chairman Madhavan Nair and 3 other scientists were suspended for entering any government job, while a Delhi HC specifically instructed the government not to take any “coercive steps.”
June 2013: After the international court proceedings, Devas Multimedia claimed at least $1.6 billion in damages for cancellation of deal with Antrix.
September 2015: Arbitration in the International court ends, as the court orders the government and Antrix to pay a definitive $672 million in damages to Devas. “Devas is hopeful that Antrix will now live up to its legal obligations and pay the award so that this dispute that arose during the prior government can be brought to a swift close,” Devas said in a public statement.
November 2015: ISRO’s Antrix approaches a Bangalore court appealing against the arbitration award issued to Devas by the international court.
2016 developments leading to the CBI charge sheet
Devas is also suspected of violating FIPB norms and regulations between May 2006 and June 2010, and could have received a total of Rs 578.54 crores illegally, according to a Firstpost report. It was also charged with flouting FDI regulations for assuring investors of a higher dividend of return, which is apparently higher than what RBI permitted at that time, the report added. The CBI and the Enforcement Directorate (ED) then files a special investigation into the Devas-Antrix deal and other unnamed government officials, as per the report.
Last month, Devas issued a public statement stating that a “Permanent Court of Arbitration (PCA) tribunal has found that the Government of India’s actions in annulling a contract between Devas and Antrix Corporation Ltd. and denying Devas commercial use of S-band spectrum constituted an expropriation. The PCA tribunal also found that India breached its treaty commitments to accord fair and equitable treatment to Devas’s foreign investors.”
CBI files a charge sheet against several government officials, Devas, and Antrix under PIC 13(2) and 13(1)(d) of Prevention of Corruption Act, “for allegedly being party to a criminal conspiracy with an intent to cause undue gain to themselves or others by abusing official positions (by public servants) and causing corresponding loss to M/s Antrix Corporation Ltd and ISRO by lease of INSAT Transponders capacity on GSAT 6 & 6A satellites to Bangalore based Private Multimedia Company.”