Chennai: After an adjudication process which is expected to begin now, Devas will have to pay triple-fold equivalent of the amount contravened, which would be over Rs 3,650 crore. According to the notice, the Foreign Direct Investment (FDI) received by Devas, Bangalore from various overseas investors including Ms CC Devas Mauritius Limited, Ms Telecom Devas Mauritius Ltd, Ms Deutsche Telkom Asia Private Limited and Ms Devas Employees Mauritius Private Limited, between May 2006 and June 2010, amounted to USD 131.44 million (about Rs 578.54 crore).
By the conditions of the Foreign Investment Promotion Board (FIPB), the agreements of a company, which is in receipt of FDI, must be subject to Indian laws.
On the contrary, the share subscription agreements entered into by Devas contained clauses relating to settlement of disputes in courts other than India and applicability other than Indian laws on matters of dispute.
Thus, the FDI received is in contravention of provisions of FEMA, and that the extent of contravention on the said count is Rs 578.54 crore.
Devas assured overseas investors an annual 8 per cent priority dividend (in addition to other dividends and distributions) on cumulative basis. "Such assured dividends are not in the nature of any equity instrument and are contrary to the provisions of FDI regulations under FEMA. The investments received by the Indian company with such assured returns are Rs 571.72 crore," the notice pointed out.
Devas also promised return higher than the ceiling fixed by the Reserve Bank of India (RBI) and was in receipt of Rs 67.50 crore under this head. This too is in contravention to the provisions of FEMA....