Antrix-Devas Case: For Forex Violations, FEMA Slaps Rs 1585 Cr Fine On Devas Multimedia
The Logical Indian Crew India
February 6th, 2019 / 3:51 PM
Image Credit: The News Minute
Devas Multimedia Pvt Ltd (DMPL), a satellite-based multimedia company, has been charged under the case of illegal foreign investment of about Rs 579 crores in a joint venture with Indian Space Research Organization (ISRO).
What has the ED found?
An Adjudicating Authority under Foreign Exchange Management Act (FEMA) has imposed a penalty of Rs 1585 crore on DMPL after an investigation was conducted by the Enforcement Directorate (ED) based on the information that the investments received by Devas Multimedia Ltd from foreign investors were in contravention of the provisions of FEMA Act. The case relates to the leasing of S-Band and restricted wavelength of INSAT satellites.
The Devas Multimedia was set up in 2004 by a few former employees of ISRO and it entered into an agreement with Antrix Corporation, a government-owned PSU which functions as a commercial arm of ISRO. Under the agreement, Antrix provided bandwidth facilities in two proposed satellites for services in the digital media and broadcasting by Devas.
The ED stated, “Investigation revealed that an amount of around Rs 579 crore was brought into the company by various foreign companies in violation of the conditions of FIPB approval and provisions of Section 6(3)(b) and 6(3)(d) of FEMA read with Foreign Exchange Management Regulations. Accordingly, show cause notice under FEMA was issued. After completion of the adjudication proceedings, a total penalty of Rs 1,585.08 crore has been imposed on DMPL, the foreign companies (investors), Indian and foreign directors of DMPL.”
In its investigation, ED has also revealed that Devas has invested 85% of Rs 579 crore investment amount which it received fraudulently from foreign investors to its subsidiary in the USA. DPML is also facing a money laundering case filed by CBI in which the company illegally agreed with Antrix Corporation by making false claims that it had ownership and intellectual property rights to use the technology for providing multimedia services in the country.
ED filed a charge sheet against DMPL in a Bangalore’s special court which took cognizance of the prosecution’s complaint on January 1, 2019, reported The Times Of India. Meanwhile, the ED has already attached assets worth Rs 80 crore of Devas for its alleged involvement in Money Laundering and request the court for its confiscation under the Prevention of Money Laundering Act.
Written by : Akansha Soni (Intern)
Edited by : Sromona Bhattacharyya