City bizmen arrested in Rs 5,600-cr NSEL scam

LUDHIANA: 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 Limited (NSEL) scam.
The accused, Kailash Agarwal of ARK Imports, had allegedly raised Rs 719.21 crores 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.
On Saturday, Aggarwal was produced before an ED court which sent him to the custody of the agency till September 29.
According to sources in NSEL, Aggarwal is among the key accused allegedly responsible for duping 13,000 investors of Rs 5,600 crores in 2013 by raising money from them and never returning it back.
Kailash who along with his son Anubhav Aggarwal had raised Rs 719.21 crore on the pretext of trading in commodities like wool, paddy, wheat, mustard oil and had projected that they are in physical possession of these commodities at their various warehouses based in Ludhiana, Samrala and Nawanshahr.
But the duo allegedly invested the money in real estate and siphoned off the majority of the amount overseas. After the NSEL scam came to the fore, both father and son were booked by Economic Offences Wing (EOW) Mumbai; ED Mumbai and Central Bureau of Investigation (CBI) under various sections of fraud and money laundering.
The sources also informed TOI that Kailash Aggarwal was earlier arrested by EOW, Mumbai and was currently out on bail. EOW is said to have already attached 82 properties (a majority of which are in Ludhiana and Nawanshahr) belonging to Aggarwal which are valued at Rs 102 crores.
According to a source in ED, Aggarwal has transferred a majority of Rs. 719.21 crores abroad and if found guilty he can be imprisoned for 7 years.
Sources in NSEL said that his son, Anubhav, is absconding for a long time and he is currently living in Dubai where he is said to have married a Russian national.
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.
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.
Duping investors
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.
Kailash who along with his son Anubhav Aggarwal had raised Rs 719.21 crore on the pretext of trading in commodities like wool, paddy, wheat, mustard oil and projected that they are in physical possession of these commodities at their various warehouses based in Ludhiana, Samrala and Nawanshahr.
But the duo allegedly invested the money in real estate and siphoned off the majority of the amount overseas.
Both father and son were booked by Economic Offences Wing Mumbai; ED Mumbai and CBI under various sections of fraud and money laundering.
Kailash Aggarwal was earlier arrested by EOW and was currently out on bail. EOW is said to have already attached his 82 properties valued at Rs 102 crore