Catch me if u can !!!

This article is an aggregation of the facts and figures circling the 2G scam and an attempt to simplify the whole trail of money as gleaned through various articles and news pieces.Also this article circles around just one of the many financial misappropriations which may have occured and specifically tries to unveil the shahid balwa-anil ambani-karunanidhi deal(i.e the DB realty-reliance ADAG-Kalaignar TV trio).But then the special attention paid to this deal is not unwarranted since at the core of it lies a financial chicanery so acute that it could have won it a nobel, had there been such a category and connecting the dots of which would be an arduous

task even for steve jobs.

So here lies the sequence of events which have made india poorer by a sum which runs into lakhs of crores of rupees.

1.Anil Ambani is lured by the looming massive profits in the upcoming spectrum allocation but cant ask for spectrum for a different company since his group ADAG already has a company by the name of Reliance Telecom.This is because of the DoT restrictions of one telecom player holding not more than 10% stake in another telecom company.

2.In 2006, Anil Ambani creates a web of companies named after animals with a initial share capital of Rs 1 lakh each. One of these companies was swan capital whose name was later changed to swan telecom on 13th july 2006.These companies had little or no business activity till jan 2007 except for a frequent change in the shareholding pattern.

Of these six companies, Parrot,Zebra and Tiger had inter-collapsible shareholding. That is Parrot and Zebra owned Tiger, Zebra and Tiger owned Parrot, and Tiger and Parrot owned Zebra.

3.The jan-feb 2007 period was the time when swan capital was about to apply for telecom licences. But since it could not do dat remaining in the ADAG group, the shares of swan were gradually transferred to Shahid Balwa's DB Realty Group.

4.Swan wanted to apply for licences in 13 circles and to become eligible for that it needed a paid-up equity of 103 crore and a net worth of 1030 crore.Aditionally, Swan needed to amend its memorandum and articles of association stating telecom as 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 110 crore, divided into 10.9 crore equity shares of Rs 10 each and 99.2 lakh preference shares of Re 1 each.

The 10.9 crore shares of Rs 10 each were divided between Tiger Traders and Reliance Telecom, with the former taking 90.1 percent of the shares and Reliance Telecom taking 9.9 percent, in conformity with the DoT guideline of an existing telecom player not holding more than 10 percent equity in a new telecom company.

So now Swan’s paid-up equity was Rs 109 crore, a little more than the required Rs 103 crore.But the net worth was still to be taken up to Rs 1,030 crore. To do that, Reliance Telecom bought the 99,20,000 preference shares of Re 1 at Rs 1,000 each, paying a boggling premium of Rs 999 per preference share, with each share overvalued by 99,900 percent.

5.While all this was done on 1 march, Swan Telecom moved its application for the spectrum on 2 march. However the 90% stakeholder in swan telecom, Tiger Traders' ownership was transferred from ADAG to Shahid Balwa only on 4 april under a complex web of transactions( i.e. only a month after Shahid Balwa had applied for the spectrum ).This makes it clear that Swan was not even eligible for the spectrum allocation on the date of application, it rather just acted as a front company for ADAG.

6.On 5th dec 2007(after Swan was successful in securing spectrum for dirt cheap rates), Reliance Telecom sold its 9.8% stake in Swan to Mauritius based Delphi Investments for just Rs 35 crore. The same group had paid a phenomenal 99,900 percent premium just a few months ago while buying preference shares in the same company.

The actual market value of the deal was valued at 800 crore.So ADAG sold it's stake at an estimated 750 crore loss.The investigators believe that the Ambani-Delphi deal was a pay- off to Raja,as is very deducible.

Similarly a massive fund transfer of 209 crore from Balwa to Kalaignar TV has been detected which is allegedly a kickback paid by Balwa to the DMK.

But the biggest slap on the Indian Government's financial sense came when DB realty sold a 44.7 stake in Swan to Dubai based Etisalat for a staggering 3200 crores profit just days after the spectrum allocation.