New Delhi: The fall-out of the Antrix-Devas controversy has pushed the BJP-lead Centre into taking confusing positions that raise questions about how serious it is in pursuing whether there was wrongdoing in the UPA-era satellite communications deal.
According to legal documents reviewed by The Wire, the Modi government has used the Central Bureau of Investigation (CBI) investigation into the deal to bolster its case while fighting investor lawsuits worth hundreds of millions of dollars.
A total of three arbitration cases were slapped on India after the cancellation of the Antrix-Devas deal in 2011.
In the most recent legal challenge, at a Geneva-seated three-member arbitration tribunal, the Modi government has argued that the CBI’s initial probe shows that Devas’s investment was made illegally and thus constitutes legitimate grounds for having pulled the plug on the contract.
Closer home, however, the ruling Bharatiya Janata Party doesn’t appear to be taking the investigation into the satellite deal as seriously.
The saffron party recently inducted former ISRO chief Madhavan Nair into the party, as part of its state unit in Kerala. In 2016, Nair and other officials were named in the chargesheet filed by the CBI.
The CBI has alleged that Nair and a handful of others caused a loss of Rs 578 crore to the state exchequer by agreeing to a deal with Devas Multimedia.
While the investigative agency’s charges are yet to be proven in court – and all the named including Nair have denied the charges – it was only in December 2017 that the former ISRO boss was granted bail by a Delhi court.
Controversy and compensation
The ‘Antrix-Devas’ controversy is shorthand for a 2005 deal when Devas Multimedia entered into a contract with Antrix (ISRO’s commercial arm) wherein the space agency would launch two satellites and provide S-band spectrum to allow the telecommunications firm (Devas) to offer higher-speed broadband services across India.
The deal was hastily cancelled by the UPA government in 2011 after allegations of impropriety and corruption surfaced in The Hindu and Hindu Business Line. India, however, has officially maintained that the contract was cancelled because the valuable S-band spectrum was needed for defence and military purposes.
The manner in which the Centre pulled the plug on the deal, however, prompted Devas Multimedia and its investors to sue India through three arbitration cases. India has lost the first two cases, placing the country on the hook for over $1.5-billion in damages.
In the third arbitration case filed by German firm Deutsche Telekom, in which India has lost but the sentencing phase is still going on, legal documents show how both parties have wrangled over the reasons behind the cancellation of the Antrix-Devas deal.
Deutsche Telekom argued that India had junked the deal because of “political considerations arising out of corruption allegations (not involving Devas) against the Indian space authorities”.
In particular, the Bonn-based telecom company blames the UPA administration for being skittish over the 2G scam.
“The parties diverge on whether the bad publicity resulting from the 2G scandal and ensuing press allegations against the Government and Devas played a role in the Government’s eventual decision to annul the agreement,” the Geneva-seated three-member tribunal’s ruling, a copy of which The Wire has reviewed, reads.
Deutsche Telekom in particular points to two sets of dates that it feels show that the deal was cancelled because of nervousness on part of the 2G scandal, rather than any national need for the S-band spectrum.
The first is February 2, 2011, when former telecom minister A. Raja was arrested. Six days later, the company notes, on February 8, 2011, is when ISRO and the Department of Space announced that the Devas agreement was going to be terminated.
The second set of dates are October 22, 2009, which is when the CBI raided the Department of Telecommunication’s offices. Two weeks later, DoS joint secretary Vijay Anand “allegedly received a complaint that the S-band spectrum has also been leased to Devas on the basis of corrupt practices”.
While India has maintained that the contract was cancelled because S-band spectrum was needed for military and defence purposes, it slightly changed tack in October 2016 when it sent a letter to the tribunal on the CBI-related developments.
“In a letter dated October 24, 2016, the Respondent [India] brought to the Tribunal’s attention ‘certain recent developments in the Devas matter’, including the filing by India’s Central Bureau of Investigation (CBI) of criminal charges against a number of government officials, Devas and certain of Devas’ officers and directors”, the tribunal’’s ruling notes.
According to legal documents, the Modi government was trying to point out if the criminal charges upheld, it would “constitute additional grounds for dismissal [of the claims], as the alleged investment will not have been made in accordance with Indian law”.
India further noted “that the filing of such charges would warrant suspension of these [arbitration] proceedings pending resolution of the charges, as important issues of public policy are implicated”, and attached a copy of the CBI chargesheet.
While the tribunal eventually rejected this argument, The Wire has learned that India has adopted this stance in other legal cases in the United States, where it is trying to stop Devas from enforcing two arbitration awards it has won.
While using the CBI’s investigation is a sound legal strategy for the Indian government abroad, the BJP’s decision to induct Nair into the ruling party back home sends mixed signals.
“He has a lot of public goodwill and is an influential personality. His decision to join the BJP is a gain for the party,” P.S. Sreedharan Pillai, state BJP president, told the Telegraph two months ago.