Antrix-Devas deal: ED slaps Rs 1,585-cr FEMA penalty notice on Devas Multimedia

The Enforcement Directorate (ED) has slapped a Rs 1,585 crore penalty notice on Devas Multimedia, its directors and foreign investor companies on charges of violation of foreign exchange law in the Antrix-Devas deal case, officials said Friday.

The penalty has been slapped on charges of getting "illegal foreign investment of around Rs 578 crore" in contravention of the Foreign Exchange Management Act (FEMA) and the conditions of foreign direct investment (FDI) imposed by the erstwhile FIBP (foreign investment promotion board).

The notice, after completion of investigation, was issued on January 30 after it was found during adjudication of the case that Devas Multimedia Private Ltd (DMPL) received investments from persons based out of India in "contravention" to the FEMA.

After adjudication of the case by the Special Director of the ED (southern region), a total penalty of Rs 1,585.08 crore has been imposed on DMPL, the foreign companies(investors) and Indian and foreign directors of DMPL, they said.

DMPL was incorporated in 2004 by a few ex-employees of the Indian Space Research Organisation (ISRO) and it subsequently entered into agreement with Antrix Corporation Ltd, a central government company, registered at Bengaluru.

Antrix is a 100 per cent government owned public sector undertaking under the control of ISRO and it functions as the commercial arm of ISRO.

The agency had registered a FEMA complaint in this case in 2012 and it is also probing the deal under anti-money laundering law (Prevention of Money Laundering Act).

Antrix 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.