Finance Minister Nirmala Sitharaman Press Conference LIVE: Finance Minister Nirmala Sitharaman is addressing a press conference wherein she cleared the air on the Antrix-Devas case. The press conference comes after the Supreme Court on Monday junked an appeal filed by Devas Multimedia challenging NCLT and NCLAT’s order to wind up the company. The top court upheld NCLT’s May 2021 order to wind up Bengaluru-based Devas Multimedia, which has been embroiled in a controversy over the last one and half decade over its 2005 agreement with ISRO’s commercial arm Antrix Corporation, which was later found to be fraudulent.
Antrix-Devas case was a fraud on people of India, says FM Sitharaman
Devas won an arbitration award of $562 million against Antrix in the ICC. India appealed in Indian courts as well as the US courts against the arbitration. Devas also filed a petition in a New York court seeking to seize the US assets of Air India saying the airline is the “alter ego of the Republic of India” and “therefore jointly and severally liable for the debts and obligations of India itself” to enforce the arbitration award.
In 2011, when the whole deal was cancelled, Devas went to international arbitration, Govt of India never appointed an arbitrator, was reminded to appoint arbitrator within 21 days, but govt didn't appoint: Finance Minister Nirmala Sitharaman
What Devas offered itself shows how blatant this agreement was. After nearly 10-11 years of struggle, we had SC come out with a comprehensive order showing how congress misuses resources of the people of India for pittance: FM Nirmala Sitharaman
I would like to talk on Supreme Court judgment on Devas-Antrix issue. SC has given a comprehensive order. UPA got this deal cancelled in 2011. It was a fraud deal: Finance Minister Nirmala Sitharaman
Agreement signed during UPA govt in 2005, it took them 6 years to cancel the order in 2011. Even when they (UPA government) cancelled, it showed glimpses that the agreement was completely wrong, and was against national security. It was a fraud against the country, said FM Sitharaman.
FM Sitharaman affirms the current status of Antrix Devas issue and implications of the Supreme Court order
Earlier, the Ministry of Corporate Affairs (MCA) had also initiated an investigation into the affairs of Devas Multimedia but the Delhi High Court had stayed the move.
Supreme Court rejected the contentions of Devas counsel Mukul Rohtagi that the criminal complaint was yet to be taken to its logical end and if the officials of Antrix and shareholders of Devas are acquitted after trial, the clock cannot be put back, if the company is now wound up.
Rejecting the contentions that the actual motive of Antrix was to deprive Devas of the benefits of a unanimous award (of $1.3 billion) passed by ICC arbitral tribunal in 2015, SC judges said that “we do not know if the action of Antrix in seeking the winding up of Devas may send a wrong message, to the community of investors. But allowing Devas and its shareholders to reap the benefits of their fraudulent action, may nevertheless send another wrong message namely that by adopting fraudulent means and by bringing into India an investment in a sum of Rs 579 crore, the investors can hope to get tens of thousands of crores of rupees, even after siphoning off Rs 488 crore.”
Even as the criminal aspects of the case are yet to be decided legally and Devas is equipped with international arbitral awards against Antrix, the apex court upheld NCLT and NCLAT's order to liquidate Devas Multimedia.
The Supreme Court on Monday had dismissed an appeal by Devas Multimedia and its parent Devas Employees Mauritius against National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT). The NCLT and NCLAT had both ordered the winding up of Devas Multimedia. The apex court upheld the NCLT decision to wind up the company.
After a US federal court in the western district of Washington confirmed the compensation awarded to Devas, on October 27, 2020, Antrix had gone in appeal to a US appeals court. On November 4, 2020, the Supreme Court of India asked the International Chamber of Commerce (ICC) tribunal award to be kept in abeyance. After the NDA government came to power in 2014, the CBI and ED were asked to investigate the deal.
The Antrix-Devas deal was annulled by the UPA government in February 2011 amid the 2G crisis, saying the S-band spectrum was needed to meet the country’s security requirements. After the cancellation of the deal, the foreign investors in Devas, including Deutsche Telekom, the three Mauritius-based investors, and Devas itself, had approached international tribunals seeking compensation. Deutsche Telekom was awarded $101 million compensation by the Permanent Court of Arbitration in Geneva; the Mauritius investors were awarded $111 million by the International Trade Law tribunal; and Devas awarded $1.2 billion by an International Chamber of Commerce.
On a petition filed by Antrix Corporation, the NCLT directed the initiation of the liquidation process for Devas Multimedia on account of fraudulent conduct. “The incorporation of Devas itself was with fraudulent motive and unlawful object to collude and connive with then officials of Antrix and to misuse/abuse process of law, to bring money into India and to divert it under dubious methods to foreign countries,” the NCLT had ordered.
“This tribunal has elaborately discussed the defence raised by Devas in the winding-up petition. This Tribunal believes that the defence raised by Devas is not substantial, and Devas deserves to be wound up on the grounds of Section 271(c) of the Companies Act, 2013. Accordingly, the finding of the National Company Law Tribunal needs no interference from this appellate tribunal, and both the appeals deserve to be dismissed,” the NCLAT said in its 375-page order.
The National Company Law Appellate Tribunal (NCLAT) in September 2021 upheld the earlier order of the Bengaluru bench of the National Company Law Tribunal (NCLT), which had on May 25, 2021 directed winding up of Devas Multimedia and appointed a provisional liquidator for the purpose. The NCLT's direction came over a petition filed by Antrix Corporation, the commercial arm of the Indian Space Research Organisation (ISRO).
Under the Antrix-Devas deal, the Indian Space Research Organisation (ISRO) was supposed to lease two communication satellites for 12 years at Rs 167 crore to Devas Multimedia. The start-up was to also provide multimedia services to mobile platforms in India using the space band or S-band transponders on ISRO satellites.
While the CBI and Enforcement Directorate were asked to probe the Antrix-Devas deal in 2014, Antrix had moved a winding up petition against Devas in January last year.
Investigating agencies CBI and Enforcement Directorate unearthed fraud in executing the agreement and have initiated PMLA proceedings. The Ministry of Corporate Affairs (MCA) had also initiated an investigation into the affairs of Devas Multimedia but the Delhi High Court had stayed the move.
In February 2011, Antrix had annulled its 2005 contract to lease space segment capacity on two satellites after allegations of the deal being a quid pro quo “sweetheart deal” were raised. Devas then had invoked the India-Mauritius Bilateral Investment Protection Agreement and moved the Permanent Court of Arbitration (PCA), which directed India to pay $111 million with interest and costs. Devas had also won arbitration proceedings before the ICC in 2015 that resulted in an award of $1.3 billion against Antrix.
While dismissing the Devas’ appeal against its winding up, a SC Bench comprising justices Hemant Gupt and V Ramasubramanian said on Monday, “we find all the grounds of attack to the concurrent orders of the NCLT and NCLAT to be unsustainable.”
Supreme Court on Monday held that, “if the seeds of the commercial relationship between Antrix and Devas were a product of fraud perpetrated by Devas, every part of the plant that grew out of those seeds, such as the agreement, the disputes, arbitral awards etc., are all infected with the poison of fraud. A product of fraud is in conflict with the public policy of any country including India.”
In May last year, the Bengaluru bench of the NCLT had ordered the winding up of Devas and had also appointed a provisional liquidator, saying the firm was incorporated with a fraudulent motive to collude and connive with the then officials of Antrix to get bandwidth from it. The NCLT’s order was also upheld by the National Company Law Appellate Tribunal (NCLAT) later in September.
Finance Minister Nirmala Sitharaman will hold a press conference on Tuesday at 4:30 pm wherein she is expected to address the Antrix Devas issue. FM Nirmala Sitharaman may reaffirm the current status of Antrix Devas issue in the conference, and also the implications of the Supreme Court order.
The Supreme Court on Monday upheld the National Company Law Tribunal’s May 2021 order to wind up Bengaluru-based Devas Multimedia, which has been embroiled in a controversy over the last one and half decade over its 2005 agreement with ISRO’s commercial arm Antrix Corporation, which was later found to be fraudulent.
