Antrix-Devas deal: ED begins probe

Last Updated: Tuesday, March 13, 2012 - 15:07

New Delhi/Bangalore: The Enforcement
Directorate has begun a "preliminary enquiry" into the
financial transactions that took place in connection with the
Antrix-Devas deal.

The Directorate`s zonal office in Bangalore has begun the
probe to ascertain if any contraventions with regard to
foreign exchange or anti-money laundering laws in the deal
have occurred.

The investigation, which the agency will conduct with the
help of the RBI and the Income Tax department, will also
check the authenticity of the alleged stake of few Mauritius
based entities in Devas Multimedia Pvt Ltd which executed the
controversial S-band deal with the ISRO.

"A preliminary enquiry has been started after
consultations and directions from the ED headquarters in
Delhi," sources in the agency said.

They, however, added that a case will only be registered
in the deal once any irregularity with respect to the Foreign
Exchange Management Act (FEMA) or the stringent Prevention of
Money Laundering Act (PMLA) is detected.

Antrix, the commercial arm of ISRO, had signed a deal
with Devas in January 2005 to provide it with crucial S-Band
wavelength which is primarily kept for strategic interests of
the country.

The ED probe will also look at the financial dealings of
individuals involved in the deal and detect if `benami` or
fictitious properties were purchased from illegal proceeds.
The spectrum was meant for running digital multimedia
service by leasing 90 per cent transponders on two satellites
- GSAT6 and GSAT6A.

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

Based on the committee`s findings, the government had on
May 31 constituted high-level team under the chairmanship of
former Central Vigilance Commissioner Pratyush Sinha to
further examine the facts and circumstances of the agreement.

The team has 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 one 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 per cent of the ordinary share capital
and the two Mauritius-based entities who held one ordinary
share and 50 per cent of the preferential shares each.

It noted as "unusual" the rise in its share capital from
Rs one 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."

"In order to get a clear picture of the changing pattern
of ownership of Devas, the economic interest of various
individuals in Devas and the extent to which the increase in
share value has been encashed by individuals, the shareholding
pattern of the company and of the Mauritius-based entities
needs to be looked into by an appropriate investigative
agency," the high-level team had said in its report made
public recently.

PTI



First Published: Tuesday, March 13, 2012 - 15:07

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