Antrix Devas and the second generation scam

Published: 22nd August 2013 07:54 AM  |   Last Updated: 22nd August 2013 08:18 AM   |  A+A-

Scams seem to have great potential to beget second generation scams. Recall the ANTRIX-ISRO-Devas scam that exploded in 2011, exposing our premier space agency, directly under the Prime Minister, of committing gross financial malfeasance, in almost throwing away the precious S Band spectrum for a song to Devas Multimedia, at the cost of the taxpayer. Devas claimed to be a satellite communication company, ostensibly started by a few former ISRO employees, including a humble chaprasi but reportedly controlled by some of the highest and mightiest in the land. Had the deal not been aborted by a vigilant media, it would have resulted in more than Rs 2 lakh crore loss to the government, according to the CAG Report.

After the scam became public, the Space Commission, chaired by K Radhakrishnan, consisting of the MoS in the PMO, Principal Secretary to the PM, National Security Adviser, Cabinet Secretary, Finance Secretary, and other eminent space scientists,in July 2010 directed the ISRO (also headed by Radhakrishnan) to terminate the contract. The matter remained shrouded in secrecy until February 2011, when finally, the Cabinet Committee on Security (CCS) decided to direct the Space Department to ‘annul’ the contract, by invoking force majeure. The government had suddenly realised that the spectrum allocated to Devas was required for the nation’s genuine and urgent social and strategic objectives! 

ISRO’s confidentiality immunity was unable to contain the public exposure of the scam, and risks for the PM as Minister for Space, were intensifying. Hence, a corresponding process for building an effective firewall around him was set in motion through the standard operating procedures -- setting up inquiries headed by cronies, selecting convincing scapegoats, and most importantly, drawing up an innovative post-facto blueprint for salvaging some of the losses of the aborted deal at the taxpayers’ cost. This hidden post-facto segment of the scam resonates of the Bhopal compensation case, where through deliberate,calibrated errors and omissions, state power conspired with the culprits to appropriate maximum compensation for common benefit, from India’s unfortunate taxpayer.

Devas had claimed in the Antrix-Devas Contract of January 2005 (Clause 12 b) that it had the ability to design Digital Multimedia Receivers (“DMR”) and Commercial Information Devices (“CID”) and had the ownership and the right to use the intellectual property involved in their designs. After allegations regarding the deal started mounting,  the ISRO chairman in December 2009 appointed B N Suresh, a senior retired scientist, to report on the technical and financial aspects of the deal, which Financial Advisor G Balachandran was asked to examine in June 2010. His findings, submitted to the ISRO chairman  in January 2011, apart from revealing the absence of due diligence in the scrutiny of the contract, also revealed some shocking, new facts. On December 2, 2010, the Financial Advisor had submitted a note to Radhakrishnan, based on the findings of a leading ISRO scientist, which stated, inter alia, that technology claimed by Devas in the Antrix-Devas Agreement to be used by it is not a confidential and proprietary technology held by Devas. The note recommended that the ISRO chairman should get this confirmed by Antrix and if confirmed these facts should be intimated to the CCS and the contract should be cancelled on the grounds that Devas had given false information when signing the contract about its ownership and right over the technology and intellectual property.

This clearly reveals that the contract was induced by fraud and misrepresentation and was void. Stating this as a reason for cancellation would have greatly strengthened the government case against Devas in arbitration and compensation claims.

However,  Radhakrishnan disregarded this unimpeachable advice of his Financial Advisor and concealed these facts from the CCS. On the basis of his misleading note, the CCS decided to ‘annul’ the contract in February 2011 and informed the Space Department that in view of the “increased demand for allocation for national needs and having regard to the needs of the country’s strategic requirements, the government will not be able to provide orbit slot in S band to Antrix for commercial activities, including for those which are the subject matter of existing contractual obligations for S Band.”

The government thus manipulated its own record to show that the contract was breached by it for its own needs and without lawful justification. The people of India, who were actually the plaintiffs were converted into defendants by the government. A red carpet was being spread to legally enable Devas’ sure success in the expected arbitration and extract maximum reparation.

The people of India are entitled to seek answers from the Hon’ble Prime Minister:-

1. Is it a fact that Secretary Space, Radhakrishnan ignored without any credible reason, the advice of his Financial Advisor supported by the note of a senior Space Department scientist, that the DVB-SH technology claimed by Devas in the Antrix-Devas Agreement, was not its confidential and proprietary technology?

2. Is it a fact that Radhakrishnan concealed these facts from the CCS in his note in February 2011, which annulled the deal on a non-existent ground that it had no spare S Band spectrum to offer?

3.Why was the real reason, that the Antrix-Devas contract had been induced by fraud and misrepresentation, excluded from our case as a ground for terming it null and void?

4. Is the belief of many people, that the truth was kept away from the Prime Minister and the CCS by some dishonest scientist-public servants unfounded or are the people who believe it without justification, only gullible simpletons?

5. What action is proposed to fix the responsibility on the Secretary, Space Department for concealing the crucial and vital facts from the CCS, the consequences of which are going to cost the taxpayer several billion dollars in the near future.

I understand Devas has demanded around $2billion in damages and Deutche Telecom, which purchased a good chunk of the Devas shares after its Antrix contract, has separately demanded another $1 billion. This amounts to Rs 18,000 crore that the country will have to shell out, if the government loses the arbitration, a highly likely eventuality, judging from the government’s actions.

I ask the Prime Minister to appoint a panel of legal experts to put the Department of Space on the right legal track to safeguard national interest and the taxpayers’  money.  Legal amends can still be made to save the nation and the taxpayer from being robbed of Rs 18,000 crore, because of the criminal conspiracy.


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