SC upholds the Winding up of Devas Multimedia
Tags: National News
The Supreme Court on 17 January 2022 upheld the National Company Law Tribunal’s May 2011 order to wind up Bengaluru-based Devas Multimedia, saying “it is a case of fraud of a huge magnitude which cannot be brushed under the carpet".
- It upheld the decision of the Bengaluru bench of the National Company Law Tribunal (NCLT) which had in May 2021 ordered the winding up of Devas and had also appointed a provisional liquidator, saying the firm was incorporated with a fraudulent motive to collude and connive with the then officials of Antrix to get bandwidth from it.
- The NCLT’s order was also upheld by the National Company Law Appellate Tribunal in September 2021.
What is the Devas MultiMedia case
In 2005 Devas MultiMedia company signed an agreement with Antrix corporation of Indian Space Research Organisation (ISRO) under which , ISRO was to lease two S-Band satellite spectrum for 12 years at Rs 167 crore to Devas Multimedia.
- The start-up was to provide multimedia services to mobile platforms in India using the space band or S-band transponders on ISRO satellites.
- In 2011 the UPA government cancelled this deal as the S- Band spectrum was needed for national security and for other social needs
- After the cancellation of the deal, the foreign investors in Devas, including Deutsche Telekom, the three Mauritius-based investors, and Devas itself, had approached international tribunals seeking compensation.
- Deutsche Telekom was awarded $101 million compensation by the Permanent Court of Arbitration in Geneva; the Mauritius investors were awarded $111 million by the International Trade Law tribunal; and Devas awarded $1.2 billion by an International Chamber of Commerce.
- Since then Devas multimedia and other shareholders have filed cases in US and Canada to seize identified Government of India properties to recover the dues.
- It is a Bangalore-based start-up, founded in 2004, is headed by Dr. M.G. Chandrasekhar, former Scientific Secretary at ISRO.
- In 2008, Deutsche Telekom picked up a 17 per cent stake in Devas for about $75 million.
- It wanted to offer satellite broadband services across India on various platforms, including mobile.
- It was set up in 1992 under the companies act 1956 and its headquarters is at Bengaluru.
- It is a wholly owned Government of India company under the administrative control of the Department of Space .
- Its main function is to promote and commercially market the products and technology developed by ISRO.
- It is a Miniratna category 1, Central Public Sector Enterprises.
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