Another company hunts Air India assets to seize
Three shareholders in Bangalore-based tech firm Devas Multimedia Pvt Ltd are looking for ways to seize Air India (AI, Mumbai Int’l) assets abroad as a means of obtaining more than USD1.2 billion the company won from the Indian government in international arbitration.
The investors – Devas (Mauritius) Ltd, Telcom Devas Mauritius Ltd, and Devas Employees Mauritius Pvt Ltd – have filed a petition at the United States District Court for the Southern District of New York to sue the state-owned flag carrier in an effort to recover sums Devas was awarded in a dispute dating back to 2011, Reuters and local media reported.
The Indian government currently owes more than USD1.5 billion to Devas and its affiliates, the shareholders claimed to the news agency.
They join British oil and gas exploration and development firm Cairn Energy, which is also investigating ways to seize Air India assets positioned around the world over a USD1.26 billion arbitration award it won against the Indian government.
Cairn Energy has sued loss-making and heavily indebted Air India in the same court in New York, and in court documents both Devas and Cairn have branded the state and the airline “alter egos” of each other, meaning that Air India should be liable for sovereign debts.
In its petition, Devas asked Air India to pay the amount or risk legally enforced seizures of its property in the US including aircraft, cargo handling equipment, even artwork.
While Cairn Energy’s grievance relates to a tax dispute against India, Devas’s is over a contract with the Indian Space Research Organisation to lease satellite space, a deal the government scrapped in 2011 after discovering alleged irregularities.
That move damaged the value of the shareholders’ investments in Devas and has sparked a number of arbitration awards that India has not paid, including one at the Paris-based International Chamber of Commerce.
In retaliation, India has ordered the tech firm’s liquidation via a bankruptcy court, claiming fraud in transactions leading up to the deal. New Delhi has “mobilised the investigative, regulatory, taxation, and judicial powers of the state in a coordinated scheme to obliterate Devas,” the shareholders said, and because of this, identifying assets to seize is “urgent and essential.”
While the Cairn and Devas court cases risk damaging India’s image as an investment destination, they also place the latest long-delayed attempt to sell Air India under threat, the Times of India pointed out.
Air India was not immediately available for comment.