hi INDiA
News Update 24X7

ED slaps Rs 1,585 crore penalty on Devas for forex violation

enforcement directorate pic20190203140304_l

Bengaluru, Feb 3 (IANS) The Enforcement Directorate (ED) imposed a Rs 1,585 crore penalty on satellite services provider Devas Multimedia Ltd, its directors and foreign investors for illegal foreign investment of Rs 579 crore against the Foreign Exchange Management Act (FEMA) 1999, the agency said on Sunday.

"The authority held Devas, its directors and foreign investors guilty of illegal foreign investment of Rs 579 crore in contravention of section 6(3) of FEMA and imposed Rs 1,585.08 crore penalty," an ED statement here said.

The city-based Devas was set up in 2004 by a few former employees of the state-run Indian Space Research Organisation (ISRO) and entered into an agreement with its commercial arm, Antrix Corp, to provide bandwidth in satellites for services on commercial basis in digital media and broadcasting space.

"Based on tip-off, an investigation was initiated on investments Devas received from overseas persons as they were in contravention of the FEMA provisions," said the statement.

The investigation revealed that Rs 579 crore was brought into the company by many foreign firms in violation of the Foreign Investment Promotion Board approval and provisions of section 6(3)(b) and 6 (3)(d) of FEMA and Foreign Exchange Management Regulations.

In another case under the Prevention of Money Laundering Act (PMLA), a designated city special court took cognisance of the prosecution complaint on February 1 against Devas for entering into an agreement with Antrix by fraudulently claiming that it had the ownership and intellectual property rights (IPRs) to use the technology for delivering multimedia services.

"Employees of ISRO and Antrix also conspired with Devas to enter into the agreement. On its strength, the latter fraudulently raised Rs 579 crore overseas and illegally transferred 85 per cent of it out of India to its subsidiary in the US in the guise of services and fee," said the statement.

The ED on February 28, 2017 attached the company’s properties valued at about Rs 80 crore for their alleged involvement in money laundering and prosecution complaint filed in the designated PMLA special court in the city, with a prayer for punishment to the accused and confiscation of their attached properties.

 

Free WhatsApp News/Events discount

Exclusive special Huge Discounts on Events to our Subscribers ONLY

Invalid email address
We promise not to spam you. You can unsubscribe at any time. PRIVACY POLICY

Get real time updates directly on you device, subscribe now.