Nirmala Sitharaman said the government was fighting in all courts to save taxpayers' money that otherwise would be going for payment of arbitration awards of such a fraud deal.

Nirmala Sitharaman speaking at press conference, gesturing with right handPTI
Money Controversy Tuesday, January 18, 2022 - 18:24

The government will use the Supreme Court order calling the 2005 deal between ISRO's commercial arm Antrix and privately-owned Devas Multimedia a fraud, to counter seizure of its properties, Finance Minister Nirmala Sitharaman said on Tuesday, January 18, as she launched an attack on the Congress for handing over airwaves used by the defence to the private firm for a "pittance".

"It is a fraud of Congress, by Congress (and) for Congress," the minister told reporters as she read out paragraphs from the Supreme Court's January 17 decision allowing winding up of Devas because of the fraud.

Antrix the commercial arm of the Indian Space Research Organisation (ISRO) entered into an agreement with Devas for providing multimedia services to mobile users, for which it was given a rare S-band satellite spectrum without the knowledge of the Union Cabinet, she said. The Congress took six years to cancel the deal and the then government did not initiate steps to fight the arbitration proceedings the private company brought against the cancellation, she added. The Congress-led UPA did not cite national security to fight the arbitrations brought by Devas, Sitharaman said and called the party "master of corruption".

Devas initiated arbitration against the annulment of the deal at the International Chambers of Commerce (ICC). Two separate arbitrations were also initiated under the Bilateral Investment Treaty (BIT) by Mauritius investors in Devas 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 USD 1.2 billion in damages. Its shareholders are pursuing Indian assets abroad to recover award and have got a French court order for freezing Indian properties in Paris and got partial rights over funds maintained by Air India in Canada.

The Supreme Court has given a comprehensive verdict upholding the liquidation of Devas ordered by the insolvency court, she said, adding this would be cited in the international courts to challenge enforcement actions of the private firm. "No country which respects rule of law will ignore these facts," she said, citing the apex court observation that it was a case of fraud of a huge magnitude which cannot be brushed under the carpet as a private lis.

Antrix had approached the National Company Law Tribunal (NCLT) seeking liquidation of Devas. Last year, NCLT ordered liquidation of Devas observing that the firm appeared to have been incorporated with fraudulent intentions. Devas appealed against the order before NCLAT which in September 2021 upheld the liquidation. Devas filed an appeal before the Supreme Court which also upheld the liquidation, she said.

Calling Congress a "master of corruption", Sitharaman asked if the party's leader Rahul Gandhi had "tore" the Antrix-Devas deal papers in 2011. He and the Congress owes answers to the nation, she said.

The minister was apparently referring to the incident of Rahul Gandhi tearing up an ordinance on land acquisition in public in 2013. The ordinance had been cleared by the then UPA II government that was led by Congress. The 2005 agreement was "a fraud on people of India, fraud against the country," she said, adding the government is fighting in every court so that Devas does not get away with Antrix deal fraud and taxpayers' money is saved.

Sitharaman said the commercial terminal award was for a total of USD 1 billion while USD 93.3 million plus cost and interest was awarded against India under the arbitration brought under the India-Germany BIT. Besides, USD 111.2 million plus cost and interest was awarded in the arbitration under India-Mauritius BIT.

"After nearly 10-11 years of struggle, the Supreme Court has come out with the decision on the case. This indicates how the Congress party has misused its position when in power," the minister said.

Commenting on the Supreme Court judgment, Matthew D McGill, Lead Counsel for Devas shareholders, said, "three separate international arbitration tribunals found that Antrix unlawfully breached its obligations to Devas. (The) ruling is a travesty of justice -- the sadly predictable result of the bogus allegations fed by the Modi government to servile domestic courts.

"Our global campaign to enforce Devas's international arbitration awards will continue without interruption or delay. And we will hold the Government of India to account for its confiscation of Devas."

Jay Newman, Senior Adviser to Devas Shareholders, said the Supreme Court "decision is not a setback, nor is it a surprise. It was scripted for months. The Modi government will now appeal to global courts waving the NCLT ruling as yet another bogus excuse to evade payment."

Courts in the US, Netherlands, Canada and France, have seen through the previous sham proceedings and evasion tactics, and this ruling is no different, Newman said, adding that Devas shareholders will continue to identify and seize Indian state assets around the world until the debt has been paid.

Meanwhile, on whether the Supreme Court order would have a negative impact on investors' sentiment, Sitharaman said it will not have an impact as the investment was a product of fraud and in conflict with the public policy.

"The basic notions of morality and justice are always in conflict with fraud and hence the motive behind the action brought by the victim of fraud can never stand as an impediment," she said quoting the order.

Observing that Congress tried to hide and dragged its feet on this unholy deal, she said it took Congress-led government six years from 2005 to 2011 to cancel the deal and a sitting minister of the then government was arrested in the case.

Attacking the then Prime Minister Manmohan Singh, Sitharaman said that ISRO which comes under the Prime Minister's Office was not aware of the deal. "There was no question of Prime Minister's Office being asked to approve this deal (Antrix-Devas). It never came to that level," she said quoting Singh's statement of February 2011.

She also questioned the Congress party for allowing blatant sale of resources of the government and people of India for pittance. "We are fighting to save taxpayers' money which otherwise would have gone to pay for the scandalous Antrix-Devas deal," she added.

Asked about specifics regarding investigations over the fraud, Sitharaman said she will be holding meeting with various departments concerned and law enforcement agencies as to how the government can proceed.

With the backing of Supreme Court order, Corporate Affairs Secretary Rajesh Verma said the winding up proceedings will start now. Liquidator has already been appointed and the process would be as per the legal procedure, he added.

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