The Antrix-Devas saga may be the most high profile case of a technology deal gone sour in India, but little has changed in India to incentivise high-technology deals involving private and public companies and prevent similar occurrences in the future.
The Supreme Court upheld a decision by the National Company Law Tribunal to disband Devas Multimedia, though this is not necessarily the end to the dispute. International courts have given verdicts favouring the private consortium seeking compensation from Antrix for cancelling a 2005 deal to lease satellite spectrum to the company to offer multimedia services.
The deal was cancelled in 2011 by Antrix, a public company and marketing arm of the Indian Space Research Organisation, on grounds of “national security.” Under the agreement, Devas was to provide multimedia services to mobile platforms in India using the S-band spectrum transponders on two ISRO satellites built at a cost of ₹766 crore.
The cancellation also came at a time when there were allegations that some officials in Antrix had colluded to give Devas valuable satellite spectrum at below-market rates and that Devas did not have the technology it claimed to have. After the NDA government came to power in 2014, the Central Bureau of Investigation and the Enforcement Directorate were asked to probe the deal.
After the cancellation of the deal, foreign investors in Devas Multimedia — the German telecom major Deutsche Telekom, the three Mauritius-based foreign investors — and Devas Multimedia approached various international tribunals seeking compensation and a U.S. federal court allowed them to seek $1.2 billion in damages. Since then, ISRO has formed a new commercial company, New Space India Ltd, that like Antrix, deals in commercial applications of space products.
Clarity lacking
Though there have been several space missions and the government has announced steps to have greater collaboration with the private sector, experts say nothing rules out the reoccurence of a similar fracas in the future.
“There isn’t clarity yet on whether satellite spectrum will be viewed differently — and globally it is viewed differently — from terrestrial spectrum, and different arms of the government can still interpret these differently. Though usage of certain bands of spectrum have been liberalised, a high-technology company still faces considerable uncertainty if it has to deal with a public sector entity,” said Narayan Prasad, Co-Founder, Satsearch, a Netherlands company that deals in space-technology products.
Ashok Gubbi Venkateshmurthy, Partner, Factum Law,Bengaluru, who was involved in an effort to draft new legislation for an updated law governing space applications in India, said that barely any inputs to prevent future conflicts as in Antrix-Devas he submitted were accepted. “This is certainly not the last we’ve seen of the litigation as it remains to be seen how the Supreme Court order will be interpreted internationally, given that India’s bilateral treaties are also at stake,” he told The Hindu.
Unlike in the e-commerce sector that saw international investments worth billions into Indian startups, the challenges are heightened when a private company moved into a space that has traditionally been occupied by the public sector. “Sectors such as telecom, defence, aerospace and satellite technology, where public sector companies, are loath to cede space, are where these issues are most likely to crop up and, to my mind, nothing has changed fundamentally. Only an evolution in institutional culture over years can result in visible change,” Mr. Prasad added.
These challenges though are not unique to India’s space or high-technology sectors. The Council of Scientific and Industrial Research in 2009 brought in place reform that allowed its scientists to launch private companies and and have a financial stake, much like professors in several leading research universities in the United States and Europe. Few, however, have actually gone on to do so because some have been harassed for their initiative.
‘Conflict of interest’
Rajesh Gokhale, now Secretary, Department of Biotechnology, an immunologist and known for throwing new light on aspects of tuberculosis, was former Director at the CSIR-Institute of Genomics and Integrative Biology (IGIB). Mr. Gokhale won the Infosys Life Sciences award, 2013, and was among the few scientists at the CSIR who founded a startup biotech company, following a change in policy in CSIR rules permitting scientists to take stake in startups.
This, however, took a turn for the worse from 2016 with a departmental inquiry on alleged ‘conflict of interest’ in his position as a director of a CSIR lab and a scientist with a founder-stake in a company. This prompted enquiries by the Central Vigilance Commission (CVC), and though several expert committees cleared him, it stalled his career progression. It was only in December, 2020 that the matter was finally laid to rest after a Delhi High Court order formally underlined his innocence.
A scientist in a prominent publicly funded lab told The Hindu on condition of anonymity that for all the emphasis on start-ups and entreprenuership, “politics” continued to influence science and technology development. “Collaborations between public and private sector can easily go awry and this is why it’s hard for public sector technology companies to seamlessly enter into intellectual property relationships. Threats of a vigilance enquiry, or other modes of public shaming, are ever present and so most merely choose to play it safe.”
