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The Centre will push ahead with its proposal to wind up Devas Multimedia after the Karnataka High Court declined to intervene in the matter. A clutch of investors in Devas had attempted to block the liquidation process in India and in a US court.
The US District Court in Washington court had initially given a temporary injunction after shareholders of Devas Multimedia filed a petition that Antrix could force a settlement on Devas without the consent of its shareholders. But this was vacated subsequently. Last week, the Karnataka High Court also allowed the liquidation pleadings filed by the Centre to be heard by the NCLT. The Centre, vide notification dated January 18, 2021, had authorised the Chairman & Managing Director of Antrix Corporation to present a petition to wind up Devas. Accordingly, Antrix Corporation filed a company petition before NCLT, Bengaluru.
NCLT has appointed a provisional liquidator who instructed Devas’ counsel, Skadden, Arps, Slate, Meagher & Flom, not to appear on behalf of the company with respect to the ongoing litigations. But Skadden would continue to represent the minority shareholders’ interests. On February 3, 2021, the provisional liquidator filed a report stating that Devas was a sham company that defrauded Antrix and engaged in other illegal conduct.
Appeal in HC
Meanwhile, Devas Employees Mauritius Private Limited (DEMPL), an entity controlled by Devas CEO, filed an appeal with the Karnataka High Court stating that the order passed by the Centre authorising the Chairman and Managing Director of Antrix Corporation to file winding up petition is mala fide exercise of power.
Lawyers representing the Government and Antrix argued that Devas did not have the ownership of any intellectual property as the technical know-how mentioned in the agreement was unknown in the world at that point of time.
“Thus, all that Devas has done is bringing money into India under different channels, and siphoning off a major portion of it,” the lawyers argued
The original dispute between Antrix and Devas is related to a satellite deal that was scrapped by the Indian agency in. The story was first reported by BusinessLine.