New Delhi/Chennai: The ED on Monday slapped a Rs 1,200 crore FEMA violation notice in connection with alleged “wrongful” gain made to private multi-media company Devas by Antrix, the commercial arm of ISRO.
An order issued by the agency’s Special Director (southern region) in Chennai found Ms Devas Multimedia Private Limited, Antrix and others “contravening” the provisions of the Foreign Exchange Management Act (FEMA) on at least three counts after completing the over three year investigation in the deal that was struck in 2005.
The agency had registered a FEMA case in 2012 and is also probing the deal under anti-money laundering laws. Antrix 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.
As per the order , the total violation under FEMA that has been established in the case is Rs 1,217.76 crore.
If the charges stand after the adjudication process that will begin now, the accused will be liable to penalty which could be three times of the amount contravened.
The show cause notice said ED probed the Foreign Direct Investment (FDI) received by Ms Devas Multimedia Private Limited Bangalore from various overseas investors including Ms CC Devas Mauritius Limited, Ms Telecom Devas Mauritius Ltd, Ms Deutsche Telkom Asia Private Limited, Ms Devas Employees Mauritius Private Limited and the Indian firm (Antrix), between May 2006-June 2010, received a total of USD 131.44 million (about Rs 578.54 crore).
It said this FDI was in violation of FEMA and FIPB rules. The second contravention pertains to Devas Multimedia assuring overseas investors an annual 8 per cent priority dividend (in addition to the other dividends and distributions) on cumulative basis.
The Antrix-Devas deal had seen the early exit of G Madhavan Nair as Chairman of Indian Space Research Organisation as he was the head of the Governing Council of Antrix when the deal was finalised.
