New Delhi:
After an embarrassing disclosure over valuable S-Band spectrum being virtually gifted to a private company by the Indian Space Research Organization (ISRO), the government has set up a review committee to examine the deal.
(Read: In official note, ISRO explains S-Band deal)Because ISRO reports directly to the Prime Minister's Office, the controversy has been especially worrying for the government.
The committee has been asked to "review the technical, commercial, procedural and financial aspects" of the agreement, signed in 2005, and "to fix responsibility for lapses".
However, it can be argued that both members of the review committee have a conflict of interest. B K Chaturvedi was Cabinet Secretary in 2005 when Devas Multimedia was allowed access to 70MHz of spectrum for 1000 crores by ISRO's commercial arm, Antrix.
(Watch: BK Chaturvedi speaks to NDTV on S-Band deal probe)Also on the committee -Roddam Narasimha - a long-standing member of the Space Commission which signed off on the sweetheart deal.
Both Mr. Chaturvedi and Mr. Narasimha therefore participated in the approval process for the Antrix-Devas deal. The committee they now form will report to the PM within a month with their post-mortem.
On Tuesday, the chairman of the Indian Space Research Organization announced that the S-Band deal is in the process of being scrapped.
The spectrum was bundled with two satellites that were being built for Devas by ISRO's commercial arm, Antrix.
ISRO has clarified that the cabinet in 2005 was not informed of the details of the deal - including the spectrum that was being allocated to Devas, which hopes to provide satellite broadband through platforms including mobile phones.
ISRO chairman Dr K Radhakrishnan said the deal had been under review since 2009, and that in 2010, the Department of Space decided that it should be nullified. When asked why it was taking so long to formally scrap the deal, officials said that there could be serious penalties involved, and so the government is moving slowly.
Devas has issued the following statement on its position:
Devas Multimedia statement:Devas Multimedia has a legally binding Agreement with Antrix Corporation, the wholly owned commercial arm of the Government of India's Dept of Space / ISRO, dated January 28, 2005. Devas proceeded with the project after required consents and approvals were obtained within GOI, culminating with Space Commission and Union Cabinet, and the same were confirmed to us by Antrix in Feb 2006.
Devas has fulfilled all of its obligations in respect of the Agreement over the past 6 years and now awaits the delivery of the contracted space segment capacity, which is more than 2 years delayed per the Agreement. Devas has secured appropriate approvals from GOI related to conducting its business. All foreign direct investment into Devas has also been with due FIPB approvals and in full compliance with government regulations.
Devas, its investors - Deutsche Telekom, Columbia Capital, Telcom Ventures - and its partners have invested significant time, capital and resources in developing an innovative, novel, integrated satellite system to serve the needs of the Indian consumers and government agencies, including for strategic applications. Devas has developed technologies that are essential for the delivery of advanced services, including societal, strategic and commercial applications, through ISRO's GSAT 6 and 6A satellites.
Devas promoters and management have significant experience in the satellite industry both in India and in overseas markets. The current Chairman and Chief Technology Officer were previously with ISRO in senior positions, and their affiliation to Devas came much after leaving from ISRO in December 1997 and April 1998 respectively, and is in full compliance with the Government of India's rules.