Mumbai: The
Enforcement Directorate (ED) arrested a Ludhiana-based businessman on Friday in a money laundering case linked to the Rs 5,600-crore National Spot Exchange (
NSEL)
scam. The
ED will produce him before a special court in Mumbai on Saturday.
The accused, Kailash Agarwal of ARK Imports, had allegedly raised Rs 700 crore from investors through the NSEL after stating that he had stored woollens of the same amount in his godown.
Afterwards, he allegedly defaulted on payments. ED officials stated that Agarwal is one of the 25 defaulters in the case.
This is the third arrest by the ED in the NSEL case. Earlier, the agency had arrested Financial Technologies India (FTIL) promoter Jignesh Shah after registering a case under the Prevention of Money Laundering Act (PMLA) in the scam. Shah was later released on bail in the ED case. However, the CBI arrested him on Tuesday in a separate corruption case involving officials at market regulator Sebi.
The ED case relates to the NSEL offering spot exchange trading in commodities, where it allegedly asked people to invest money in certain companies to earn attractive returns. The suggested companies used to claim that they had goods worth crores of rupees in their godowns to lure investors. Officials stated that Agarwal, too, had woollens far less than the Rs 700 crore worth he claimed.
Suspecting illegal trading in NSEL, the government shut down all deals two years ago. This led to a payment crisis with companies defaulting on investors’ payments. Officials stated that they are following the money trail between FTIL, NSEL and other entities. They suspect that many of the transactions in the scam could be only on paper and they are still examining the details.
In May 2014, the Economic Offences Wing (EOW) of the Mumbai police too had arrested Shah after registering a fraud case in the NSEL scam.