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14. Have Devas’ leadership and investors been harassed by the Government of India?

For a decade, starting immediately after the first arbitration claim was filed, the Government of India has been routinely harassing and retaliating against the leaders and employees of Devas in India.  This has included raids on offices, illegal seizure of documents, detention and prolonged questioning of employees, pressuring people to sign false statements under threat of arrest and illegal doctoring of summonses to cover their actions.

It began in August 2011; a month after Devas’ first claim was filed in the International Chamber of Commerce (ICC) when the Government’s Enforcement Division (ED) ordered Devas to submit to invasive and unlawful inspections of its documents and records.(1) After the Delhi High Court issued an injunction to halt these intrusions, the Government of India ignored it and issued eight more notices demanding that Devas explain, within 10 days, why its incorporation should not be cancelled or face criminal proceedings.(2)

The Ministry of Finance then began demanding personal tax and banking information from Devas directors in December 2011, without ever specifying any reason for the investigation or alleged violations.(3)

The Indian tax authorities also launched a harassment campaign after arbitration proceedings went forward by claiming that under a services agreement with its U.S. subsidiary, Devas Multimedia America Inc. (DMAI), none of the payments made were “arm’s length” and therefore subject to tax.  It demanded details of investments and information on allotment, sale and purchase of shares, while attempting to nullify deductions taken on valid expenses and imposing a huge tax bill.(4)

In early January 2017, the Government of India (through the ED) froze the bank accounts and other assets of Devas in India, as well as accounts of several of its personnel. The Government of India’s actions plainly were intended to financially cripple the ability of Devas to defend itself.(5)

On January 23, 2017, three officials from the ED stormed into Devas’ offices and conducted an illegal search and seizure. They seized various original documents and the company’s checkbook, and detained four Devas employees, three of whom were questioned for over 15 hours with no communication with the outside world or access to counsel.  The ED then pressured them – under threat of arrest – into signing prepared statements as well as summonses to appear at the ED. The summonses were created after the ED had already hauled in the Devas employees, and then backdated to make them appear as though they were legitimate.(6)

On January 30, 2019, the ED – without having heard Devas, its investors, or its present and former directors/officers – purported to issue a penalty order of approximately US$ 220 million against Devas, its investors, and present and former directors/officers.(7)

Recently, an Inter-Ministerial Monitoring Committee, spearheaded by India’s Finance Minister, was formed to expedite all harassment proceedings against Devas and its investors “on a war footing”, including generating large tax bills, penalties and interest through spurious actions in order to offset the arbitration awards.(8)

  1. Witness Statement by Ramachandran Viswanathan to the UNCITRAL tribunal (The Hague).   Paragraph 217.
  2. Viswanathan, Paragraph 218.
  3. Viswanathan, Paragraph 220.
  4. Viswanathan, Paragraph 222.
  5. Petition to Recognize and Confirm Foreign Arbitral Award. CC/Devas (Mauritius) Ltd., et al v. The Republic of India. W.D. Wash. Case No. 18-cv-01360. Filed 1/13/2021. Paragraph 81. 
  6. W.D. Wash. CC/Devas (Mauritius) Ltd., et al Petition. Paragraph 81. 
  7. W.D. Wash. CC/Devas (Mauritius) Ltd., et al Petition. Paragraph 81.
  8. Letter from Government of India, Income Tax Department, Regarding “War Footing” Against Devas. November 4, 2020.