The directorate's zonal office in Bengaluru has begun the probe to ascertain if any contraventions with regard to foreign exchange or anti-money laundering laws in the deal have occurred.
The investigation, which the agency will conduct with the help of the Reserve Bank of India and the Income Tax department, will also check the authenticity of the alleged stake of few Mauritius-based entities in Devas Multimedia Pvt Ltd, which executed the controversial S-band deal with the Indian Space Research Organisation.
"A preliminary enquiry has been started after consultations and directions from the ED headquarters in Delhi," sources in the agency said.
They, however, added that a case will only be registered in the deal once any irregularity with respect to the Foreign Exchange Management Act or the stringent Prevention of Money Laundering Act is detected.
Antrix, the commercial arm of ISRO, had signed a deal with Devas in January 2005 to provide it with crucial S-Band wavelength, which is primarily kept for strategic interests of the country.
The ED probe will also look at the financial dealings of individuals involved in the deal and detect if 'benami' or fictitious properties were purchased from illegal proceeds.
The spectrum was meant for running digital multimedia service by leasing 90 per cent transponders on two satellites -- GSAT-6 and GSAT-6A.
Following complaints of massive irregularities, the government scrapped the contract in 2010 and ordered an enquiry by the high-powered review committee last February.
Based on the committee's findings, the government had on May 31 constituted a high-level team under the chairmanship of the former central vigilance commissioner Pratyush Sinha to further examine the facts and circumstances of the agreement.
The team has found uneven share holding patterns and rise in capital in Devas between the time of its inception in December 2004 and March 2010. The company was established by M/s Forge Advisors, USA with a share capital of Rs 1 lakh.
According to the report, soon after the signing of the agreement the ordinary share capital had increased to over Rs 5 lakh with 12 shareholders including three members of the FA-USA team who held 60 per cent of the ordinary share capital and the two Mauritius-based entities who held one ordinary share and 50 per cent of the preferential shares each.
It noted as "unusual" the rise in its share capital from Rs 1 lakh to about Rs 18 lakh in 2010 "with no asset base and no Intellectual Property rights or patent in the relevant technology, and which has been making losses since inception, to collect Rs 578 crore as share premium from foreign investors."
"In order to get a clear picture of the changing pattern of ownership of Devas, the economic interest of various individuals in Devas and the extent to which the increase in share value has been encashed by individuals, the shareholding pattern of the company and of the Mauritius-based entities needs to be looked into by an appropriate investigative agency," the high-level team had said in its report made public recently.