The Central Bureau of Investigation (CBI) has been investigating top industrialist Anil Ambani's alleged hand in weaving the 2G spectrum loot in a conspiracy with arrested telecom minister A Raja, with charge of pay-offs through a Mauritius firm and a Delhi realtor.

If sources are to be believed, Mumbai builder Shahid Balwa of Swan Telecom (now Etisalat DB Telecom), who is on the CBI remand until Friday, turns out to be a front man of Ambani who allegedly started machinations back in 2006, registering half a dozen companies using names of wild creatures like swan, tiger, parrot, penguin, zebra and giraffe with a share capital of just Rs 1 lakh each.

Anil Ambani was confronted with the CBI's documentation on Wednesday at its headquarters here and also brought face to face with Raja to question him over a dozen banking transactions in a single day among his Anil Dhirubhai Ambani Group (ADAG) companies on October 18, 2007, the day his Reliance Telecom got the 2G (GSM) licence under the dual technology policy. Raja's interrogation ended on Thursday, with a Delhi court sending him to a 14-day judicial custody in Tihar Jails until March 3.

The sources said Ambani was also closely prodded on the Reliance Telecom picking up Swan Telecom's 99.20 lakh preference shares of Re 1 at Rs 1,000 each to built up the company's net worth to be eligible to apply for 2G licence and selling Reliance stake of 9.8 per cent equity to Delphi Investments of Mauritius for a song in just Rs 35 crores on December 5, 2007 at a loss of over Rs 950 crores.

No surprise, the ADAG officials are putting out press releases on regular basis to assert that nobody in the group had any kind of stakes in Swan Telecom on the day (January 8, 2008) it got the licences. They also try to justify 9.8 per cent equity in the company as legal as the rules allow an existing telecom firm to have maximum stakes of 10 per cent, but they do not explain as to why the need then to sell off this equity at a throwaway price to Delphi Investments.

The CBI believes the sale was an alleged pay-off to Raja. Its interrogators say Ambani decided to dispose of the equity after becoming certain that Swan was certain to get the precious licence in less than a month as it was already ahead in the race, having applied on March 3, and Raja made it clear to the Prime Minister that he was going ahead with the first-come, first served policy.

Earlier, the Reliance Telecom executives were also questioned on why they bought the preference shares of Swan Telecom paying a boggling premium of Rs 999 per share when the company had not yet taken off. When the ADAG and Reliance Telecom executives were asked about the real owners of Delphi, they wriggled out saying the deal was made through the merchant bankers.

The CBI has already sent a letter rogatory to Mauritius last month to find out identity of the people who control the dubious Delphi as it suspects the company is connected to bank accounts in Switzerland and a few other tax havens.

Another letter rogatory has gone to Mauritius to probe the Dubai-based Etisalat Telecom buying 44.7 per cent stake in Swan Telecom by floating a new company, Etisalat Mauritius, instead of investigating directly. The CBI has sought the bank details of the new company as it suspects the Indians' black money was being routed to India through it.

ADAG kicked off the whole game plan forming one after another companies in 2006 with Rs 1 lakh initial share capital each and named after animals, giving address of the registered office of ADAG and money in all came from the top group officials and ADAG or its director owned the equity. Here is the list of these companies:

--Swan Infonet (later renamed Parrot Consultants) incorporated on 17 March 2006,
--Tiger Traders on 20 March 2006,
--Swan Advisory Services Pvt Ltd (later renamed Zebra Consultants Pvt Ltd) on 21 March 2006,
--Penguin International Ventures Pvt Ltd (later renamed Reliance Utility Engineers) on 26 June 2006,
--Giraffe Consultancy Pvt Ltd (later renamed Sidhartha Consultancy) on 27 June 2006, and
--Swan Capital Pvt Ltd (later renamed as Swan Telecom) on 13 July 2006.

Interestingly, Parrot, Zebra and Tiger had inter-collapsible shareholding: Parrot and Tiger owned Zebra, Zebra and Tiger owned Parrot, and Parrot and Zebra owned Tiger!
The shareholding pattern of Swan Capital Pvt Ltd, which then became the Swan Telecom, was owned by ADAG companies till 20 January 2007 when all its 10,000 shares were taken over by Tiger Traders.
 
Anil Ambani was questioned on one of his group companies, Sonata Investments, transferring Rs 100 crores to Oriental Buildtech, a company of the real estate Anant Raj Group of Delhi tycoon Amit Sarin, on March 3, 2007 and Anant Raj Aencies, another firm of Anant Raj Group, transferred it to Sidahrtha Consultancy that had been bought over by Balwa-led DB Realty Group only six days ago. Swan Telecom of Balwa applied for the 2G licence on the same day. The CBI believes the timing and nature of these round transactions are extremely suspicious.

When Swan Telecom applied for the licence, on paper Tiger Traders was the majority stakeholder and Reliance Telecom a minor shareholder, but this Tiger Traders was also an Ambani firm owned by Parrot and Zebra and it was officially taken over by Balwa only a month after Swam applied for the licences.

When Swan Capital (later Swan Telecom) and its holding companies were transferred to Balwa, they had paid-up equity of Rs 1 lakh, and did not meet the DoT requirement of paid-up equity and net worth to qualify for the 2G licences. It was here that ADAG made dubious investments in the firm to make it eligible to apply for licences across 13 of the total 22 telecom circles.

ADAG transferred Swan Capital to Tiger Traders on 20 January 2007. Two days later, on 22 January, the share capital of Swan was increased from Rs 1 lakh to Rs 4 crore. Even this was not enough as Swan required paid-up equity of Rs 103 croers and a net worth of Rs 1030 crores as per DoT guidelines and amendment of its article of association to make telecom its core business.

On 15 February, Swan Capital was changed to Swan Telecom. And on 1 March, the company’s paid-up equity was increased to Rs 109 crore, divided into 10.9 crore equity shares of Rs 10 each and 99.2 lakh preference shares of Re 1 each. Tiger Traders was shown having 90.2 per cent of the equity shares, the rest with Reliance Telecom.

And, on March 2, Reliance Telecom bought over the whole lot of preference shares at Rs 1000 each, paying an unexplained mind-boggling premium of Rs 999 per share. This was obviously done to show the company as the net worth required for eligibility.

Rest is the history as to how Swan Telecom got the licences and became one of the nine beneficiaries of what has come to be known as a Rs 1.76 lakh crore 2G spectrum scam.