The Enforcement Directorate has moved a special court in Bengaluru to declare Ramachandran Viswanathan, founder and CEO of space startup Devas Multimedia, as a fugitive economic offender for not appearing for trial.
A deputy director of the ED told a special court on Saturday that Viswanathan and a US wing of Devas had failed to appear in court despite being issued notices to them last year. The official said that the accused were “deliberately avoiding” appearance despite being fully aware of the case and proceedings and wanted to declare both as fugitive economic offenders.
The court issued a notice to the US-based CEO and Devas Multimedia America Inc, following an ED application under the Fugitive Economic Offenders Act, 2018. It is informed of December 12, 2022, a communication received from the Department of State and a communication received from the United States for service of court notices in that country.
Devas Multimedia was struck down by the National Company Law Tribunal in May 2021. The ED alleged that Viswanathan and nine others diverted 85 per cent of the Rs 579 crore foreign direct investment the startup had received to the US following a 2005 deal with the Indian Space Research Organization (ISRO) after the satellite deal was canceled in 2011. ED chargesheet was filed against them in 2018.
Declaring a person as a fugitive economic offender will allow the ED to seize property in India and abroad identified as proceeds of crime.
Viswanathan is now president of Omnispace LLC, a satellite communications startup in the US, which is assembling a constellation of satellites to get 5G from space – especially to provide connectivity in remote areas where terrestrial mobile networks don’t work.
Others charged in the case under the Prevention of Money Laundering Act are Devas Multimedia Director MG Chandrasekhar, Devas Chief Technology Officers Deshraju Venugopal and Nataraj Dakshinamurthy, Finance Director Ranganathan Mohan and three Devas subsidiaries.
In September 2022, the Karnataka High Court acquitted KR Sridharamurthy, former executive director of ISRO’s Antrix Corporation, in the case. While others responded to the summons issued by the special court for trial, Viswanathan did not. The 2005 agreement between Devas Multimedia and Antrix Corporation was to use two ISRO communications satellites to provide multimedia services to mobile devices in remote areas where conventional, terrestrial telecom networks do not have reach.
ISRO contracted to lease two communication satellites for 12 years at a cost of Rs 167 crore to Devas Multimedia. The startup was to provide video-audio services to mobile platforms in India using space band, or S-band spectrum, transponders on ISRO’s GSAT 6 and 6A satellites built at a cost of Rs 766 crore.
The Devas Multimedia-Antrix Corporation deal was scrapped by the UPA government in February 2011 after allegations that the deal was a “sweetheart deal” in the backdrop of the 2G scam. After the NDA government came to power in 2014, the CBI and ED launched a full investigation into the 2005 satellite deal. The CBI had in 2016 filed a chargesheet against Devas and Antrix and their officials, including former ISRO chairman G Madhavan Nair, for corruption.
After the contract was terminated in 2005, Devas Multimedia and its foreign investors approached the International Arbitration Tribunal to seek compensation for their losses. They have been awarded damages by three arbitral tribunals for the failed contract, the largest being the September 14, 2015, International Chamber of Commerce Tribunal of over $1.2 billion. This was affirmed by a US federal court on October 27, 2020 Antrix Corporation filed an appeal of the order to the US Court of Appeals for the Ninth Circuit.
Based on the CBI and ED case against Devas Multimedia, the National Company Law Tribunal in May 2021 ordered the winding up of Devas alleging that Devas was fraudulently created. The Supreme Court upheld this order in January last year.
On August 29, 2022, the Delhi High Court set aside the ICC tribunal’s award of $1.2 billion in damages to Devas Multimedia and its investors, stating that the award “constitutes patent illegality and fraud and is contrary to public policy in India”.
Its investors, including Devas Multimedia and Germany’s Deutsche Telekom, have been embroiled in a protracted legal battle around the world over the Indian government’s 2011 decision to cancel the satellite deal between the former and ISRO’s Antrix Corporation.
Enforcement Directorate Indian Express News(T) quoted Indian Express
