New Delhi: The Centre has informed the Supreme Court that Devas Multimedia, a Bengaluru-based start-up which entered into a satellite deal with Antrix Corporation – the commercial arm of ISRO – “neither had the technology, nor hired the technology”.
According to the January 2005 agreement, Antrix had agreed to build, launch and operate two satellites and to make available 70 MHz of S-band spectrum to Devas, which it planned to use to offer hybrid satellite and terrestrial communication services throughout India. In February 2011, Antrix terminated the agreement. Later, Devas moved various legal avenues in India, including the Supreme Court, which directed for a tribunal.
On Wednesday, Attorney General K.K. Venugopal, representing the Centre, submitted before a bench headed by Chief Justice S.A. Bobde and specifically denied the possibility of mediation in the matter, on the ground that the Union of India has discovered a serious fraud in the entire series of transactions leading up to the disputes including the arbitration agreement.
The Centre has highlighted that Rs 579 crore which was received by Devas between May 15, 2006 and June 14, 2010, were retained in the form of liquidity without putting it into any productive use. The Centre informed the top court that experimental license was fraudulently issued in favour of Devas, and hybrid technology, cited by it, was not in existence at the relevant time. “Devas neither had the technology, nor hired the technology,” said the Centre.
On the aspect of money laundering, the Centre said the monies were never utilised for any operational purposes and no tangible or intangible properties were purchased. “Other than paying upfront capacity utilisation fee to Antrix to the extent of Rs 58,37,34,000, the remaining money were available intact in the account of Devas Multimedia. Out of which it first sent out share subscription money of Rs 76,19,04,563 in creating its wholly-owned subsidiary Devas Multimedia America Inc,” said the Centre’s application.
The Centre said Devas started transferring Rs 180.77 crore into its wholly-owned subsidiary Devas Multimedia America Inc, as service fee towards business support services. “It is interesting to highlight that it paid around Rs 40 crore for the period 2006 – October 2010 for which there was no agreement at all. The agreement was entered into only in October 2010 with the US subsidiary,” added the plea.
When the PMLA authorities confronted these details with the Directors/employees of Devas Multimedia India, a confessional statement was made that the whole operations were driven from USA and through the US subsidiary entity and the Indian holding company had no big role to play. “The entire payment of Rs 487,07,78,278, comprising of share subscription money, service fee towards business support and legal fees cannot be supported with any evidence and nothing in fact was furnished by Devas India to the PMLA authorities,” added the Centre.
The Centre has said the entire substratum of the contract is vitiated by serious fraud which is substantiated by a statutory investigation conducted by the statutory investigating agencies not only under the Code of Criminal Procedure but also under various other penal enactments. “It is a settled position in law that fraud vitiates everything and when the roots of the contract are itself diluted with pre-meditated and pre-conceived fraud, every other steps taken subsequent thereto also stand vitiated,” said the Centre.
On Wednesday, the Supreme Court had put in abeyance the execution of an award passed by a US court asking Antrix Corporation to pay compensation of USD 1.2 billion to Devas Multimedia, for cancelling a 2005 satellite deal.