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RAM JETHMALANI
ETHICS & POWER

Ram Jethmalani is a senior politician and eminent lawyer.

Antrix-Devas space odyssey continues

The Antrix-Devas contract was induced by fraud and misrepresentation and was void.

wonder how many people remember the details of the Antrix-Isro-Devas deal, which exploded in 2011. It was an utterly corrupt deal that exposed our premier space agency — coming directly under the Prime Minister — as being involved in gross financial malfeasance, in almost throwing away 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 a loss of more than Rs 2 lakh crore to government, according to a Comptroller and Auditor General report. However, scams in India do not succumb easily, and show great potential for second generation follow-up.

After the illegalities of the deal became public, the Space Commission chaired by Dr Radhakrishnan, and consisting of MOS, Prime Minister's Office, Principal Secretary to the PM, National Security Adviser, Cabinet Secretary, Finance Secretary, and other eminent space scientists, in July 2010 directed Isro (also chaired by Dr Radhakrishnan,) to terminate the contract. But curiously, Isro did so only after February 2011, burying the scandal under a shroud of secrecy until then. Meanwhile, Devas was busy confabulating with Space Commission members, including Dr Radhakrishnan, discussing ways and means of expediting the launch of INSAT 6. Finally, the Cabinet Committee on Security took a decision in February 2011 and directed the Space Department to "annul" the contract, by invoking force majeure. The government had suddenly realised that the spectrum allocated to Devas was essentially required for the nation's genuine and urgent social and strategic objectives.

With Isro's previous "holy cow" immunity of confidentiality not able to contain public exposure of the scam, the risks for the PM as minister, directly in charge of Space Department, were intensifying. Hence a corresponding process for building effective firewalls around him was set in motion through the usual and notorious operating procedures — setting up enquiries headed by cronies, selecting convincing scapegoats, and most importantly, drawing up an innovative post-facto blueprint for salvaging some losses of the aborted deal at the cost of India's taxpayer.

This hidden post-facto segment of the scam has not yet reached the public domain. It is like a variation of the Bhopal compensation case, where deliberate, calibrated errors and omissions were made, and the heft of state power conspired with the culprits to appropriate as much compensation as possible at the expense of the unfortunate taxpayer.

Let us begin with the Antrix-Devas contract of January 2005, where Devas claims in Clause 12(b) that it had the ability to design Digital Multimedia Receivers ("DMR") and Commercial Information Devices ("CID"), and has the ownership and right to use the intellectual property involved in their designs.

After allegations regarding the deal started surfacing, the Isro chairman, in December 2009 appointed Dr Suresh, a senior retired scientist, to report on the technical and financial aspects of the deal. Financial adviser G. Balachandran was then asked by Chairman Isro in June 2010 to examine it, which he dutifully did, and submitted his findings to Chairman Isro in January 2011. This report, which I am informed is now in the public domain, blew the lid on several misdemeanours of some top Isro scientists, and found ample neglect of due diligence in the legal and financial scrutiny of the contract.

The report also reveals some more shocking facts. On 2 December 2010, the financial adviser had submitted a note to Radhakrishnan, based on the findings of a leading Isro space scientist, which stated, inter alia, that the DVB-SH technology claimed by Devas in the Antrix-Devas agreement to be used by them is not a confidential and proprietary technology held by Devas. The note recommends that Chairman Isro may get this confirmed from MD Antrix, and if so, the same should be intimated to the Cabinet Committee on Security, and the contract should be cancelled on grounds that Devas had given false information about its ownership and right to use the intellectual property used in the design of the DMR and CID, when signing the contract.

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 the arbitration and compensation claim.

However, Dr Radhakrishnan disregarded this unimpeachable advice of his financial adviser, and decided to conceal these facts from the Cabinet. On the basis of his misleading note, the Cabinet Committee on Security decided to "annul" the contract, and directed the Space Department that in view of the "increased demand for allocation for national needs, including for the needs of defence ... railways ... public utility services, 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."

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 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.

People are entitled to seek answers to the following questions from the Hon'ble Prime Minister or someone properly authorised by him:

1. Is it a fact that the space secretary, Dr Radhakrishnan ignored without any credible reason the advice of his financial adviser, supported by the note of a senior Space Department scientist, that DVB-SH technology claimed by Devas in the Antrix-Devas agreement to be used by them was not a confidential and proprietary technology held by them?

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

3. Why was the real reason that the contract had been induced by fraud and misrepresentation, excluded from our case in declaring it null and void?

4. Is the belief of many people that the truth was kept away from the Prime Minister and the Cabinet by some dishonest scientist-public servants, not founded, or are the people who believe it only gullible simpletons?

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

I understand Devas has demanded around $2 billion as damages, and Deutsche Telecom, which had purchased a good chunk of Devas shares after its agreement with Antrix, has separately demanded another $1 billion. In rupee terms, even at Rs 60 per US dollar, the country will have to shell out around Rs 18,000 crore, if Government loses the arbitration, for which Isro and the Department of Space are making every possible effort.

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

 
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