Devas lobbies with US lawmakers for India deal

Devas Multimedia, whose satellite communications contract with the Indian government-owned Antrix was scrapped after a controversy, has been lobbying in the US to push forward its case before the US President and other lawmakers and has paid USD 140,000 so far for the same.

As per the disclosure reports filed with the US Senate, lobbyist firm Hogan Lovells US LLP began lobbying on behalf of Bangalore-based Devas Multimedia before the American lawmakers in June 2011.

Hogan Lovells said in its latest quarterly disclosure report that it was paid USD 60,000 during the fourth quarter of 2011 (October-December period) for lobbying on behalf of Devas.

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Prior to this, Hogan Lovells had earned USD 60,000 in the third quarter and another USD 20,000 in the second quarter of 2011 as lobbying-related income from Devas, its disclosure filings with the US Senate showed.

Hogan Lovells has been registered as a lobbyist of Devas Multimedia in the US since June 6, 2011.

Queries regarding to the disclosure sent to Devas remained unanswered.

As per the disclosure reports, Devas has been identified as a ‘satellite communications and technology company’. Without naming Antrix, the lobbyist firm has said that the lobbying issues for its client Devas Multimedia include “foreign direct investment and government procurement issues relating to a satellite communications contract in India.”

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Hogan Lovells has further said that it was lobbying for Devas’ case before the US Senate, the Department of State and the Executive Office of the President.

While the specific reasons for lobbying in the US could not be ascertained, Devas Multimedia on its website lists entities like German telecom giant Deutsche Telekom AG, private equity firm Columbia Capital LLC and Telecom Ventures as its shareholders.

The company describes itself as “an Indian company headquartered in Bangalore” and says it was founded in 2004 by a team of successful satellite entrepreneurs and executives.

The company says its integrated satellite system ensures seamless connectivity throughout India and it aims to “deliver advanced Internet-based multimedia and interactive data services to hand-held mobile terminals via a unique IP-based platform.”

A controversy had erupted years after the signing of the deal in January 2005, under which Antrix was accused of giving Devas an unrestricted access to the high-frequency S-based spectrum, known to be highly valuable for mobile broadband services, from two satellites at very low valuation.

The deal was annulled by the government in February 2011 and two separate committees were set up to probe any irregularities in the matter.

Devas says it entered into a definitive agreement for Space Segment Lease in January 2005 with Antrix for a dedicated portion of leased transponder capacity on GSAT-6 and GSAT-6A for its integrated satellite network.

A High Level Team (HLT), chaired by former Chief Vigilance Commissioner Pratyush Sinha, has recommended investigation into the functioning and operations of Devas since its inception, when it had a share capital of Rs 1 lakh with two shareholders.

As per the findings of the HLT, the agreement with Antrix was signed in January 2005 and by December 31 that year, the ordinary share capital had increased to over Rs 5 lakh with 12 shareholders.

“As on March 31, 2010, Devas had 17 shareholders with Deutsche Telecom (holding 20 per cent), the two Mauritius based entities (holding 17 per cent each) and Dr MG Chandrasekhar, another ex-ISRO scientist (holding 19 per cent) being the largest ones together holding over 73 per cent of the ordinary share capital, the HLT said.

The HLT said that such a high premium of Rs 578 crore earned from foreign investors was unusual and could have been only because of the Antrix deal, for an internet service provider like Devas with an initial share capital of Rs 1 lakh, no asset base, no IPR or patent in the relevant technology, and making losses since inception.

“Changes in the shareholding pattern of Devas have led to two Mauritius-based entities holding 34 per cent and foreign entities holding over 54 per cent of Devas’ ordinary share capital as on March 31, 2010,” it further said.

“… 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 HLT said.

PTI