Devas deal will be annulled, confirms PM

NEW DELHI: Devas Multimedia's controversial deal with state-owned Antrix Corporation will be annulled using the sovereign power and function of the state, Prime Minister Manmohan Singh said on Wednesday. The deal has been the latest in a series of controversies to dog the second-term PM's government.

Eventually, it has been decided that the government should take a sovereign policy decision," the PM said, ending weeks of speculation about the future of the deal, which packs the usage of precious spectrum in a satellite transponder capacity lease. Singh was speaking at an interaction with TV editors.

Devas Multimedia, which has all along maintained that its 2005 deal is as per due procedures and has obtained approvals, reacted by saying the company will seek legal recourse if the deal is annulled unilaterally. "Devas Multimedia reiterates that it has a legally binding Agreement dated January 28, 2005, with the Government of India's Department of Space/ISRO/Antrix.

The Contract has not been cancelled or annulled by the Government/DoS/ISRO/Antrix as of date and Devas has not elected to terminate the Agreement despite DoS/ISRO/Antrix being in material breach. Devas expects the Government to fulfil all its obligations under the Agreement and will take strong, including legal, steps to protect the Company's rights and interests," the Bangalore-headquartered company said in a statement.

The prime minister devoted a lot of energy countering the charges his government is facing on the deal during his media interaction. He read out a prepared statement while answering questions on Devas, in what was otherwise an impromptu interaction.

The agencies mired in the controversy, including the Department of Space, come under the direct supervision of the Prime Minister's Office. This has helped opposition parties to take the attack on the government to the PM's doorstep. Coming close on the heels of the 2G spectrum scam, the Devas deal, currently under the review of multiple agencies, has been a lightning rod of criticism for the UPA government.

He strongly denied that there were any kinds of 'backroom talks' between Devas and the PMO or Department of Space. He also emphasised that no effort was made by the PMO to dilute the recommendations made by the Space Commission in July, 2010, to annul the deal.

"There have been no backroom talks... There has been no effort in the PMO to dilute in any way the decision taken by the Space Commission in July 2010. On that, I would like to assure you and the country," the PM said.