CBI files case in connection with Devas-Antrix deal, conducts raids | india | Hindustan Times
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CBI files case in connection with Devas-Antrix deal, conducts raids

CBI on Wednesday carried out searches after registering a case to probe an alleged Rs 578-crore "wrongful" gain to a private multi-media company Devas by Antrix, the commercial arm of ISRO.

india Updated: Mar 19, 2015 09:48 IST

CBI on Wednesday carried out searches after registering a case to probe an alleged Rs 578-crore "wrongful" gain to a private multi-media company Devas by Antrix, the commercial arm of ISRO.

After registering a case on Monday, CBI sleuths conducted the searches at the premises of Devas Limited as well as the then executive director of Antrix KR Sridhara Murthi in Bengaluru, official sources said.

CBI registered a case and submitted an FIR against Murthi, MG Chandrasekhar and R Vishwanathan of Forge Advisors, Devas Multi-media Private Limited and unnamed officials of Antrix, ISRO and Department of Space in a designated court in Bengaluru.

The agency has slapped 120-B (criminal conspiracy), 420 (cheating) of Indian Penal Code and relevant sections of Prevention of Corruption Act against them.

The Antrix-Devas deal had seen early exit of G Madhavan Nair as chairman of ISRO as he was the chairman of the governing council of Antrix when the deal was finalised.

It is alleged that the accused people had entered into a criminal conspiracy and the government officials abused their position by favouring Devas by giving them rights for delivery of videos, multimedia and information services to mobile phones using S-Band through GSAT-6 and GSAT-6A satellites and terrestrial systems in India.

The accused officials "thus caused wrongful gain of Rs 578 crore" to the private firm and its owners, CBI alleged.

CBI said that a deal between Antrix and Devas was fixed in principle in January 2005 for lease of S-Band transponders. However, the then executive director of Antrix signed it on behalf of Antrix six months later only after ensuring that Chandrashekhar and Vishwanathan were majority stakeholders in Devas multi-media, which roles they continued till 2008-09.

The change in the board, where a US company represented by Chandrashekar and Vishwanathan had majority stakes, was never verified by Antrix as the agreement had gone in violation of Shankara Committee which had recommended execution of any such agreement with an Indian company only.

CBI has alleged that when a proposal seeking budgetary support of Rs 269 crore for approving design, manufacture and launch of GSAT-6/INSAT-4E (PS1) was placed in the 104th meeting of the Space Commission on May 26, 2005, it was not informed that the agreement had already taken place with Devas Multimedia for leading out the S-Band.

"The approval of Space Commission was obtained by keeping it in dark," CBI alleged in its FIR.

It alleged that on November 17, 2005 a note for the Cabinet was submitted for building the GSAT-6 satellite as earlier approved by the Space Commission.

"Information regarding the agreement between Antrix Corporation Limited and Devas Multimedia Limited was suppressed from the Cabinet and the wrong information regarding utilisation of satellite capacity was given to the Cabinet with respect to multiple expressions of interest though the agreement was signed with Devas Multimedia without any multiple expressions of interest.

The proposal was approved by the Cabinet in December 2005," it alleged.

CBI said in its FIR that after alleged omissions and commissions on the part of accused persons surfaced, the agreement dated January 28, 2005 was annulled by Antrix Corporation in accordance with the decision of the Cabinet Committee on Security headed by the then PM Manmohan Singh.

The spectrum was meant for running digital multimedia The spectrum was meant for running digital multimedia service by leasing 90 per cent transponders on two satellites -- GSAT-6 and GSAT-6A.

Following complaints of massive irregularities, the then government scrapped the contract in 2010 and ordered an inquiry by the high-powered review committee last February.

A high-level team led by the then CVC Prityush Sinha had found uneven share holding patterns and rise in capital in Devas between the time of its inception in December 2004 and March 2010.

The company was established by M/s Forge Advisors, USA with a share capital of Rs 1 lakh.

According to the report, soon after the signing of the agreement, the ordinary share capital had increased to over Rs 5 lakh with 12 shareholders including three members of the FA-USA team who held 60% of the ordinary share capital and the two Mauritius-based entities who held one ordinary share and 50% of the preferential shares each.

It noted as "unusual" the rise in its share capital from Rs 1 lakh to about Rs 18 lakh in 2010 "with no asset base and no Intellectual Property rights or patent in the relevant technology, and which has been making losses since inception, to collect Rs 578 crore as share premium from foreign investors."