Devas-Antrix agreement as fraud
GS Paper - 3 (Economy)
The National Company Law Appellate Tribunal (NCLAT) has upheld an order of the Bengaluru bench of the National Company Law Tribunal (NCLT) to wind up Devas Multimedia Private. The appellate tribunal has also said that it was apparent that a fraud had occurred. One of the major findings of NCLAT in its order is that every benefit or advantage accrued to Devas under the 2005 agreement was “through fraud, misrepresentation or suppression”.
Devas Multimedia and Antrix Corporation Deal
- In 2005, Antrix corporation had signed an agreement to lease two communication satellites to Devas for 12 years for Rs 167 crore.
- Devas, which then was a startup incorporated just for the purpose, was to provide audio-video services to mobile platforms in India using the space or S-band on ISRO’s GSAT 6 and 6A satellites.
- The Devas Multimedia-Antrix Corp agreement was cancelled by the then UPA government in 2011 after allegations of the deal being a quid pro quo “sweetheart deal” were raised.
- In 2014, the Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) were asked to probe the deal.