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ED moves to prosecute Devas for Fema violation

Earlier ED issued a show-cause notice to the directors of Devas for over Rs 1,200 crore

Policy Pulse
Publish Date: Jul 27 2016 11:37AM | Updated Date: Jul 27 2016 11:37AM

ED moves to prosecute Devas for Fema violation

Devas Multimedia, the former joint venture partner of Isro's commercial arm Antrix, has to contend with the Enforcement Directorate move to prosecute the firm under the Prevention of Money Laundering Act (PMLA) for violating Foreign Exchange Management Act (FEMA) norms.

An ED investigation against the Bengaluru-based company and its directors and foreign subsidiaries under PMLA and FEMA is underway. They were issued a show-cause notice for over Rs 1,200 crore, twice the amount the company had invested in its joint venture with Antrix.
The possible course of action may include imposition of penalty on Devas, and prosecution of the company and all its directors under PMLA, a top source said.
A showcause notice is a precursor to attachment of assets of the company for an amount equivalent to the FDI violations. Besides, the government said on Tuesday it was liable to pay as compensation only up to 40 per cent of the value of the investment Devas had made in the JV.
FDI of $131.44 million (Rs 578.54 crore) was received between 2006 and 2010 by Devas Multimedia Pvt Ltd from various overseas investors. The foreign firms are also being investigated under PMLA.