The Cabinet Committee on Security has scrapped the contract between the Indian Space Research Organisation’s commercial arm, Antrix, and Bangalore-based multimedia firm Devas.
The five-member committee, headed by Prime Minister Manmohan Singh, formalised the decision on Thursday, a day after the PM had to face questions on the deal that triggered the latest round of corruption charges against the government.
Devas, however, indicated on Wednesday that it would take legal action if the deal was annulled. The company said this evening that it was yet to be formally informed on the scrapping of the deal.
The deal, signed on January 28, 2005 involved launching of two satellites almost exclusively for Devas, which would use S-band transponders.
Questions were raised if the deal was supposed to aim at benefiting Devas, as it was allowed to sell its equity in violation of norms. Secondly, it involves the allotment of S-band spectrum at a time when the demand has risen from the defence and other strategic sectors.