CBI registers case in the huge Antrix-Devas scam

Lalit Shastri

antrix-devas scamThe Central Bureau of Investigation (CBI) has registered a case against K.R. Sridharamurthi (former MD of ANTRIX), Ram Vishwanathan of USA based Forge Advisors LLC, MG Chandrasekhar, a former ISRO official and chairman of Devas and Devas Multimedia Pvt Ltd of Bangalore in the huge Antrix-Devas S-band Transponders scam.

The 2005 agreement between Antrix Corporation Limited (ANTRIX) of Department of Space (DoS) and DEVAS Multimedia Private Limited for lifetime lease of 90 per cent capacity of S-band Transponders of two Satellites that were to be built by Indian Space Research Organisation (ISRO) is a huge scam that opened up the Pandora’s box and points to high-level conspiracy and total systemic failure that could have even jeoparised the security of India.

In the midst of allegations and mudslinging, the ANTRIX-Devas agreement, which was signed when Mr G. Madhavan Nair was chairman ISRO, was canceled in February 2011. Commenting on the findings of the high powered review panels and the Government’s action taken report released by ISRO, a Ministry of Space source had told me at that point of time that the proposal from Devas was not put on the agenda when the ANTRIX Board took it up for consideration without even a proper quorum. Even the minutes of the Board meeting were not signed. He went on to point out that all talk of restructuring ANTRIX and reforms in the Space Commission would amount to putting the same wine in the same bottle unless the posts of Chairman of Space Commission, Secretary Department of Space, and Chairman of ISRO are not segregated.

A High Powered B.K. Chaturvedi-Prof Roddam Narasimha Review Committee (HPRC), appointed by government of India had reviewed the technical, commercial, procedural and financial aspects of the Agreement and categorically pointed out that the agreement with Devas indicated certain financial and strategic gaps and the then Chairman ANTRIX Board/Secretary DOS, Director SATCOM, ISRO member Finance, and Space Commission were primarily responsible for the lapse.

Another five-member High Level Team (HLT) constituted under the chairmanship of Pratyush Sinha IAS (Retd) and former CVC, with mandate to examine acts of omission and commission submitted its report to the Government on September 2, 2011.

The SATCOM Policy was approved by the Union Cabinet in January 2000 and the INSAT Coordination Committee (ICC) was authorised to earmark at least certain percentage of INSAT transponders capacity for use by non-governmental users. While ICC met 78 times between 1978 and 2004, it failed to meet even once between 2004 and 2009. The responsibility of calling the ICC meeting lay with Secretary, DOS and Director (SCPO), who were chairman and secretary of ICC.

When technology for multimedia mobile services based on space platform was evolving in 2004-05 a proposal was received by ANTRIX/ISRO from Forge Advisors of USA for a joint venture in April 2004.

The Chaturvedi-Narasimha panel pointed out in its report that the agreement signed with Devas in January 2005, which provided for two satellites PS1 and PS2 had several weaknesses. The agreement was signed with a company which had paid up share capital of only Rs. 100,000. ANTRIX/ISRO had to launch the satellite and penalty had to be paid by them if they did not adhere to the agreed time frame. ISRO committed itself to launching the satellite and incurring the risk of searching for alternative users if Devas failed to develop the new technology for mobile services. While ISRO was to invest about Rs. 800 crore in two satellites and their launches, it provided 90 per cent of the 2500-2690 MHz band leaving very little spectrum with ISRO for any strategic or societal use in future. It has been pointed out that any other multimedia mobile service (MMS) use in the band would not have been efficient due to interference of signals.

A delegation, led by the then ISRO chairman Dr. K. Kasturirangan, had visited the US in July-Agust 2003. Before that Forge Advisors, a consulting firm, had visited India and made presentation to ISRO in March-May 2003. During Dr. Kasturirangan’s US visit an MoU was signed between ANTRIX and FA-USA. Nothing was mentioned about MMS in this MoU. Subsequently a proposal was submitted by FA-USA stating that ISRO was to invest in the space segment and FA-USA in the ground segment for forming a strategic partnership for launching a satellite based national service. Even while a committee headed by Dr. K.N. Shankara, Director Space Application Centre, Ahemedabad was examining the proposal, the ANTRIX Board unanimously accorded in principle approval for processing the JV proposal with Devas on June 11, 2004.

Subsequently, after the Shankara Committee had suggested that Devas would pay annual fee of $11.25 million instead of proposed $ 9 million for the lease period “when Devas became cash positive”, the ANTRIX Board approved the draft agreement with Devas. It was also noted that FA-USA were promoting the establishment of an Indian company called Devas Multimedia Pvt. Limited, which would establish the service and lease the capacity for it. This was a company formed by former ISRO scientists.

On May 26, 2005, a proposal was placed in the meeting of Space Commission for approving design, manufacture and launch of GSAT-6/INSAT-4E.The proposal was approved by the Cabinet in December 2005 and on February 2, 2006 ANTRIX informed Devas of receipt of approvals on the satellite frequency coordination and the contract thus became effective from that date.

The contract was formalized when it was not clear what technologies FA-USA had access to full intellectual Property Rights (IPR). Knowledge on this count was important for the business model of transponder leasing eventually adopted by ANTRIX as the satellite system had to be configured keeping the available technology required for hand-held devices in perspective. The High Powered Committee set up by the Government made it clear that the ANTRIX-Devas Project was a clear violation of government policy and the ANTRIX-Devas agreement, which had provided 90 per cent of the transponder capacity of the first satellite and the same proportion of a second satellite to be used by Devas. This meant utilization of a large part of the S-band spectrum by one private user-Devas. This was against the INSAT Policy, which was “non-exclusive.

The Committee also took the view that from the national security perspective, allocation of a large part of the spectrum to a private player like Devas was unjustified from the security point of view. This was more so since Devas had later entered into an agreement and transferred the controlling rights to Deutsche Telekom AG (DT). The committee pointed out specifically that for this failure, which undermines the security needs of the country, the responsibility primarily lay with the then Secretary DOS and Director SATCOM, and Chairman ISRO/ANTRIX Board.

In a statement on February 4, 2012, ISRO had issued a statement and pointed out that a High Powered Review Committee and a High Level Team have been reconstituted to conduct necessary investigation for possible acts of omission and commission linked with the ANTRIX-DEVAS Agreement h by bringing in new people and dropping others including those whose names have surfaced in the reports of the High Powered Review Committee and the High Level Team.
If and when the Government decides to institute criminal or other charges against any person, that person will be provided appropriate opportunity and due process shall be followed.

The Union Ministry of Corporate Affairs and Department of Revenue were asked to conduct necessary investigation for possible acts of omission and commission leading to the agreement between Antrix Corporation Limited (ANTRIX) of Department of Space (DoS) and Bangalore based DEVAS Multimedia Private Limited on January 28, 2005 for lifetime lease of 9 per cent capacity of S-band Transponders of two Satellites, to be built by Indian Space Research Organisation (ISRO).

Inquiries by me at that time had revealed that the Ministry of Corporate Affairs had initiated a probe but the Enforcement Directorate had not started investigations into the leasing of two satellites by Anrix to a company lacking credible standing.

Government of India had set up the High Powered Review Committee (HPRC) on February 10, 2011, to review the technical,commercial, procedural and financial aspects of the Agreement Antrix Corporation Limited (ANTRIX) had entered into with DEVAS. ISRO later clarified that appropriate Committees have been reconstituted by bringing in new people and dropping others including those whose names have surfaced in the reports of the High Powered Review Committee and the High Level Team (HLT).

The HLT had sought “clarifications” from all the officers who at any point in time had dealt with the files concerning the Antrix-DEVAS agreement and the decisions on the satellites. Apart from G Madhavan Nair (former Secretary of DOS); A. Bhaskaranarayana, (former Director of SATCOM Office and former Scientific Secretary of ISRO); and S.S. Meenakshisundaram (former Member Finance, Space Commission),the HLT included to the list, K.R. Sridharamurthi (former MD of ANTRIX); Dr. K.N. Shankara (former Director of ISRO Satellite Centre and Chairman of the Committee for evaluation of DEVAS proposal); Ms. Veena S. Rao (former Additional Secretary, DoS); G. Balachandhran (former Additional Secretary/FA, DoS) and Dr. R.G. Nadadur (Additional Secretary/FA, DoS and former Joint Secretary, DoS), for seeking clarifications.

, ,
One comment on “CBI registers case in the huge Antrix-Devas scam
  1. Pingback: CBI files chargesheet against former secretary of Space and ED of Antrix Corporation | Newsroom24x7

%d bloggers like this: