Wednesday, August 17th, 2022 10:38:52

Dodgy Deal?

Updated: May 26, 2012 3:50 pm

There are far too many cooks in India, spoiling the broth. What CAG, or for that matter, most government agencies do, is akin to the conducting of a postmortem of the dead body and also what treatment was given to the patient.

The same happened to the deal between Indian Space Research Organisation (ISRO) commercial arm Antrix Corporation and Devas Multimedia which was concluded in 2005.

Talking about the spectrum has become a fashion, though many do not understand, where it is and what it is and whether you can buy it like an eatable. In 2G case, it is a virgin territory to make any guess, as to how much would have been earned or lost if a particular course had been followed. Neither the business, nor life can or does work on the lines expected by us.

The agreement

As per the deal, Antrix was to provide 70 MHz S-Band spectrum to Devas, which is into multimedia services. Antrix would provide the spectrum by leasing out transponders of two satellites to be built mainly for Devas.

It is worth while to examine the back ground of Devas. It is a Bengaluru-based company, founded in 2004, and was headed by a Scientific Secretary at ISRO, who had headed satellite radio company World Space. In 2008, Deutsche Telekom picked up 17 per cent stake in Devas for about $75 million. Columbia Capital and Telcom Ventures are the other international investors. Devas Multimedia committed to pay $40 million as pre-launch capacity reservation and $250 million for satellite capacity lease payments. ISRO/Antrix was to have a representative on the Devas Multimedia board of directors. The two were to share revenue once services start.

It has clearance from the Foreign Investment Promotion Board (FIPB) for 74 per cent foreign direct investment. It got a trial spectrum from the DoT and had planned to apply for a full licence. About Devas system, it is claimed, to be capable of delivering applications for rural development, e-governance, emergency communications, remote connectivity, and extending satellite communications service to all over India, and would have supplied critically needed information in agriculture, weather, education and health care to remote areas strategic services. It would have provided India a unique satellite-based platform. The use of this unique system could possibly help greatly in meeting the challenges of terrorists—particularly the Naxalite-operating from remote and inaccessible terrains.

The government set up a Committee chaired by former Central Vigilance Commissioner which, with a hind-sight, concluded that there have been serious lapses of judgment on the part of various officials, and in some cases the actions verged on the point of breach of public trust. Verging is different from the actual breach of trust.

Another Committee of BK Chaturvedi and Roddam Narasimha, as well as a statement on both the committees and the follow up action on their recommendations, holds Nair Bhaskaranarayana, Sridharamurthi and Shankara as mainly responsible for leading the Department of Space (DoS) and Antrix for the contract.

It also recommended investigation by an appropriate agency to look into the changing pattern of ownership of Devas, the illegal financial benefit derived by individuals and officials, and the extent to which the increased valuation of Devas shares were encashed by individuals. But it left it vague, instead of naming anybody culpable, as most government committees packed by the retired Bureaucrats do. They have thrown the onus on government investigation agencies to substantiate their report without giving a shred of evidence, as to how and what laws have been violated.

According to the Committee, there was no consultation with any other central government department including the department of telecommunications on the utility of the technology that would deliver multimedia and information services through satellite and terrestrial systems to mobile receivers, and regulatory requirements, for the proposed services before committing to build two satellites for the deal.

While the policy is to allow use of satellites by non-government users on non-exclusive basis, the Antrix deal with Devas provides for exclusive use of two custom-built satellites leaving no scope for alternate use.

The Committee said the approval process for the deal was riddled with incomplete and inaccurate information given to the Union Cabinet and the Space Commission.

Of course, nowhere in the deal, any allegations of bribery or corruption have been made. However, the Committee said that the deal indicated certain financial and strategic gaps (hazy as usual) for which the chairman of the Antrix Board, secretary of the Department of Space, member finance of the Space Commission and director of SATCOM at ISRO were primarily responsible.

Incidentally, more harm was done by faceless bureaucrats than tyrant dictators. The PM himself has exhorted the officials to be quick in taking decision, while speaking on the Civil Services Day, in April, 2012. The main reason for raising objection to any proposal is to prove that the proposal has been examined and quite often, it is ulterior, for getting kickbacks.

Union Corporate Affairs Minister says that the serious frauds office (SFO) of his ministry into the Antrix-Devas deal will come in the picture only if any investigation that the ministry may order pinpoints a fraudulent side to the deal or criminal intention to defraud the union government. It is funny, as it appears at present, that government has woken up, apparently on being egged by somebody or as a fallout of 2G Spectrum. What exactly is the violation of foreign exchange regulations, has nowhere been revealed.

The government becomes insomniac occasionally. Why not it has a mechanism which makes all possible checks, before anybody invests in any joint venture or even Foreign Investment Promotion Board gives approval. It is a sheer harassment to wake up after six years pointing out irregularities, when the government itself had approved it.

The only beneficiary from this whole transaction is the Indian Administrative Service, which has added a Secretary to Government of India post to its kitty, taking it away from the Chairman of the ISRO. Normally a generalist would not know anything about the space. It was the IAS officers, who processed the entire proposal and put up for the Cabinet approval. It was for them to seek an clarification they wanted. They are the real guilty, if one goes by the Committees reports, which have pointed out above lacunas.

But no action has been taken against any body from that fraternity, to which the heads of the Committees belonged . How is it that the IAS officers, who put up the matter to the Cabinet did not look into the alleged acts of omission and commission of its fraternity? I hold no brief for anybody. But penalising the scientists and others appears to be a too thick a bait to swallow.

Most of the time, noise made about this scam is much ado about nothing, as still no results are apparent from any action or inquiry done by any agency including the enforcement directorate so far.

This kind of approach will affect the Foreign Direct Investment and will demoralise the scientists. There might be a genuine misjudgment as various committees say with hind sight. How is it that no Cabinet Secretary, who is responsible to scrutinise all papers before they are put up to the Cabinet and his others cohorts have escaped for their role.

The reports of the Committees are flawed, one sided. Hang the guilty, but after a judicial inquiry by a Supreme Court Judge, who both by profession and deed not only is impartial, but also people have full confidence in him. But not on the reports of the bureaucrats, who seek post-retirement sinecures to shield deserving worthies. The Government is playing the dog in manager, in hitting the scientists and the FDI .

 By Joginder Singh

(The author is a former Director, CBI)

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