Indian satellite boss in $672m “conflict”
October 28, 2015
An international Arbitration Tribunal, which earlier in October ordered India Space Research Organisation’s commercial arm (ANTRIX) to pay out $672 million to Bangalore-based Devas Multimedia, has released its findings. They do not make pleasant reading for ISRO or ANTRIX, or the Indian government.
It has also emerged that India’s police are investigating the overall deal, and has slapped formal notifications that it is looking at the case under 120-B (criminal conspiracy), 420 (cheating) of Indian Penal Code and relevant sections of Prevention of Corruption Act.
The Tribunal states that Dr K Radhakrishnan, chairman of the ANTRIX commercial division, was also chairman of ISRO and also chairman of the Space Commission and secretary, Department of Space (DoS), and was in the position of a “clear and irreconcilable conflict of interest”. ISRO cancelled a contract between ANTRIX and Devas in 2011.
The contract covered the leasing of 90 percent of the transponders on a pair of ISRO-owned satellites. When the contract was terminated Devas resorted to arbitration, as provided for in the contract, seeking damages, which the Tribunal awarded.
The Tribunal recognised that Dr Radhakrishnan held these positions in line with the government’s norms at the time, but the tribunal concluded that Radhakrishnan, in his capacity as ANTRIX chairman, did not do “everything in his power” to prevent the cancellation of the agreement.
Dr Radhakrishnan retired in December 2014. The Tribunal observed that it was Radhakrishnan who, as ISRO chairman, had obtained advice from the Law Ministry on how to annul the contract and then informed the Space Commission that it was “inevitable” that the contract be scrapped. Then, he sat as chairman of the Space Commission that decided to terminate the contract, the panel noted.
“Dr Radhakrishnan would not have taken those steps because they would have required him to adopt diametrically opposed positions in respect of the Devas agreement: on the one hand, that the agreement should remain on foot, and on the other, that it should be annulled. This would have created a clear and irreconcilable conflict of interest,” the Tribunal’s order stated.
The $672 million award to Devas will grow at a rate of 18 percent per annum until paid. “Devas is hopeful that Antrix will now live up to its legal obligations and pay the award so that this dispute that arose during the prior government can be brought to a swift close,” said a Devas spokesman.