The Ministry of Corporate Affairs (MCA) has initiated an investigation into the books of Devas Multimedia, embroiled in the controversial S-band spectrum deal with ISRO's commercial arm Antrix, for alleged irregularities in its shareholding pattern.
"The MCA is going to look into valuation of shares, high premium on issue of shares and dilution of shareholding of Devas Multimedia," a senior MCA official told PTI.
The Department of Space has asked the Ministry for information on these issues, the official added.
The MCA has formed a three-member team to look into the matter, which is under the jurisdiction of Registrar of Companies Bangalore.
The investigation has been ordered under Section 235 of Companies Act, 1956, the official said.
Despite repeated attempts, the company could not be reached for comments.
The official added that the company came on MCA's radar because of sharp rise in the value of shares of private investors in Devas Multimedia after signing the deal.
In September 2009, the company's board increased the share capital to Rs 20 lakh from Rs 17.5 lakh.
The Bangalore-headquartered company has been under the scanner for its deal signed with Indian Space Research Organisation's (ISRO's) commercial arm Antrix Corporation Pvt Ltd in January, 2005.
The space agency had earlier said that "no competitive bidding" was followed for the deal.
As per the deal, Antrix was to provide the crucial S-Band wavelength, which is primarily kept for strategic interests of the country, to Devas for running its digital multimedia service by leasing 90 per cent transponders on two satellites- GSAT-6 and GSAT-6A.
The company had to pay Antrix a total of $300 million (about Rs 1,500 crore) over a period of 12 years.
Antrix had signed the contract and got the sanction of the Space Commission and the Union Cabinet for the two satellites at the cost of nearly Rs 400 crore without informing them that bulk capacity would be leased to Devas.
In December 2009, ISRO ordered a review of the deal and, subsequently, the Space Commission recommended its annulment on July 2, last year.
Last month, a five-member high-level team appointed by the Prime Minister had completed its probe into the deal.