‘Devas entered into a conspiracy with one of the highest levels of Government, namely, the Secretary level’.
New Delhi: Officials handling the ANTRIX-DEVAS contract at Department of Space (DOS), which was headed by former Prime Minister Manmohan Singh, hid crucial information from Singh and indulged in a criminal act of suppressing departmental findings which, now, is likely to cause massive financial losses to public money and a loss of face to the Narendra Modi government unless the GoI rectifies the mistakes done in previous dispensation.
“Termination of ANTRIX-DEVAS contract as ordered by the Space Commission in its 117 meeting need be expedited. Note submitted by Dr Kibe on 01.12.10 needs to be examined seriously. If those contentions are valid, annulment of the contract will be at no loss to the government even in the event of arbitration,” wrote former IAS officer Gopalan Balachandran on 2 December 2010.
Balachandran, a 1977 batch West Bengal cadre officer, who joined the Department of Space (DoS) in April 2009 as Financial Advisor in the rank of Additional Secretary, wrote this after he was asked to review a report submitted by B.N. Suresh, a senior scientist, who studied the technical, legal and commercial aspects of the Antrix-Devas deal.
However, what Balachandran and Dr S.V. Kibe—another scientist with Indian Space Research Organization (ISRO) of which Antrix is the commercial arm—found was never placed before the government of India. This deliberate commission of suppression of what Balachandran and Kibe found by top officials at DOS and other allied organizations, all of whom are still providing their services to the present government, has come back to haunt the India government in a big way.
Firstly, it has resulted in three adverse arbitration awards against India. The first by commercial arbitration at the International Chambers of Commerce (ICC) and the other two at BIT (bilateral investment treaty) arbitrations—by Mauritian investors CC/Devas under the India-Mauritius BIT and Deutsche Telekom under the India-Germany BIT. The total cost of the compensation awarded in all these three arbitrations runs to almost Rs 15,000 crore.
More importantly, it has led to a loss of face of the Indian government at international forums and the generation of a narrative that it is “risky” to do business with an “unpredictable” Indian government.
Both these actual and notional damage, officials say, would not have happened, had the government of India called off the deal while giving the reason of “fraud” and not “force majeure” and “national security” which it ultimately used. But it could not do so, as this crucial information—that Devas had indulged in alleged fraudulent act was—hidden from it.
In his findings, Balachandran had also stated: “In case Dr Kibe’s observations are validated, the same need be intimated to the Cabinet Committee on Security (CCS) by necessary modifications to the draft committee put up by me to secretary in the first week of October 2010. As the secretary is aware, we need to circulate the draft note to the concerned departments viz., defence, law and finance (Exp) before submitting the same to the Prime Minister who is our cabinet minister. An urgent action will therefore be required to be taken. Submitted along with Dr Kibe’s notes.”
Balachandran, among other things, stated one crucial thing: “It can therefore be safely stated that the DVB-SH technology is not a confidential and proprietary technology held by Devas multimedia. It is not clear whether Devas multimedia obtained the rights to use this technology in India from ETSI.”
In simpler words, what Devas promised to sell to Antrix was neither unique, nor held by it, nor had it the intellectual property rights of the DVB-SH (Digital Video Broadcast-Satellite Handheld) technology which was with ETSI (European Telecommunications Standards Institute).
What Devas also managed to do was to hide the fact that not only did it not have an IPR, but it also succeeded in suppressing this information from reaching the Cabinet. Available documentary evidence clearly suggests that this was accomplished by Devas by entering into a conspiracy with one of the highest levels of Government namely, Secretary level.
Less than 50 days after putting these findings in writing in front of his reporting boss, (Secretary, DOS), Balachandran was transferred out of the DOS. The contract between Antrix and Devas was executed on 28 January 2005 and terminated on 25 February 2011 on the grounds that government of India needed the satellite spectrum for national security and other social purposes after which
Following this, Devas initiated arbitration against the annulment at the International Chambers of Commerce (ICC).
Two separate arbitrations were also initiated under the Bilateral Investment Treaty (BIT) by Mauritius investors in Devas Multimedia under the India-Mauritius BIT and by Deutsche Telekom—a German company—under the India-Germany BIT.
India lost all three disputes and has to pay a total of $1.29 billion in damages. A French court recently ordered freezing of an Indian government property in Paris on a plea by Devas shareholders.
Officials believe that all these damage can be undone if the Modi government present the fraudulent aspect of this deal in from of the courts abroad as then it will lead to the dismissal of the Devas pleas for execution of the arbitration award and also reinforce the view that India honours its commercial commitment but does not tolerate fraud.