Enforcement Directorate has begun probe to ascertain if any contraventions with regard to foreign exchange or anti-money laundering laws in deal have occurred.
The Enforcement Directorate has begun a “preliminary inquiry” into the financial transactions that took place in connection with the Antrix-Devas deal.
The Directorates zonal office in Bangalore has begun the probe to ascertain any contraventions with regard to foreign exchange or anti-money laundering laws in the deal have occurred.
The investigation, which the agency will conduct with the help of the RBI and the income tax department, will also check the authenticity of the alleged stake of few Mauritius-based entities in Devas Multimedia Pvt Ltd, which executed the controversial S-band deal with the Isro.
“A preliminary inquiry has been started after consultations and directions from the ED headquarters in Delhi,” sources said.
They, however, added that a case will be registered in the deal once any irregularity with respect to the Foreign Exchange Management Act (FEMA) or the stringent Prevention of Money Laundering Act (PMLA) is detected.
Antrix, the commercial arm of Isro, had signed a deal with Devas in January 2005 to provide it with crucial S-Band wavelength which is primarily kept for strategic interests of the country.
The ED probe will also look at the financial dealings of individuals involved in the deal and detect if benami or fictitious properties were purchased from illegal proceeds. The spectrum was meant for running digital multimedia service by leasing 90% transponders on two satellites.
Following complaints of massive irregularities, the government scrapped the contract in 2010 and ordered an inquiry by the high-powered review committee last February.
Based on the committee's findings, the government had on May 31 constituted high-level team under the chairmanship of former Central Vigilance Commissioner Pratyush Sinha to further examine the facts and circumstances of the agreement.
The team has found uneven share holding patterns and rise in capital in Devas between the time of its inception in December 2004 and March 2010.
The company was established by M/s Forge Advisors-USA with a share capital of Rs1 lakh.
According to the report, soon after the signing of the agreement, the ordinary share capital had increased to over Rs5 lakh with 12 shareholders including three members of the FA-USA team, who held 60% of the ordinary share capital and the two Mauritius-based entities, who held one ordinary share and 50% of the preferential shares each.
It noted as “unusual” the rise in its share capital from Rs1 lakh to about Rs18 lakh in 2010 "with no asset base and no Intellectual Property rights or patent in the relevant technology, and which has been making losses since inception, to collect Rs578 crore as share premium from foreign investors.”
“In order to get a clear picture of the changing pattern of ownership of Devas, the economic interest of various individuals in Devas and the extent to which the increase in share value has been encashed by individuals, the shareholding pattern of the company and of the Mauritius-based entities needs to be looked into by an appropriate investigative agency,” the high-level team had said in its report made public recently.
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