NSEL scam: Second biggest defaulter used investors’ money to buy properties in Dubai
One of the biggest defaulters in the National Spot Exchange Scam used investors’ money running into hundreds of crores to buy properties in Dubai. Ludhianabased ARK Imports is accused of collecting Rs 719.37 crore from investors and failing to return the money.
The diversion of funds was revealed after the Enforcement Directorate, which is probing the irregularities in the Jignesh Shahpromoted NSEL, arrested ARK Imports director Kailash Agarwal on September 23 for his alleged role in the case.
Sources in ED said that Agarwal and his associates purchased commercial spaces, plots and bungalows worth hundreds of crores of rupees in Dubai. The money used for these investments was laundered through hawala channels.
“We have already attached 127 acres of land worth Rs 67 crore belonging to ARK Imports. Some properties, where promoters of the firm had invested, have been identified, while the process to track down other properties is on. The process for attachment of the properties in Dubai will be initiated soon” said a senior ED official.
A PMLA (Prevention of Money Laundering Act) court last week rejected Agarwal’s bail petition after ED argued that he had diverted investors’ money to purchase properties in the Gulf. Agarwal, who has been remanded in judicial custody till November 7, is currently lodged in the Taloja Central Jail.
In July 2015, the Bombay High Court passed an order allowing authorities to sell off properties of ARK Imports to recover Rs 719.37 that it owes to the investors.
The firm is the second largest defaulter after NK Proteins, which failed to repay Rs 969.89 crore to investor, in the massive fraud. Earlier, Agarwal was arrested by the Economic Offences Wing of Mumbai police in August 2014 and granted bail a month later.
The NSEL scam came to light after the government in 2013, ordered the spot exchange to stop trading in some instruments, triggering a payment crisis. Following this, the exchange was forced to suspend trading and eventually down shutters, leaving over 13,000 investors in the lurch.
Most of the defaulters had promised that goods being traded were stored in various warehouses but it never existed. This led to major crisis in repayment of those who had invested in these stocks.
The diversion of funds was revealed after the Enforcement Directorate, which is probing the irregularities in the Jignesh Shahpromoted NSEL, arrested ARK Imports director Kailash Agarwal on September 23 for his alleged role in the case.
Sources in ED said that Agarwal and his associates purchased commercial spaces, plots and bungalows worth hundreds of crores of rupees in Dubai. The money used for these investments was laundered through hawala channels.
Of the 22 defaulters who duped nearly 13,000 people of Rs 5,600 crore in the NSEL scam, ARK Imports is the first such company that has been identified by the ED to have made investments overseas.
“We have already attached 127 acres of land worth Rs 67 crore belonging to ARK Imports. Some properties, where promoters of the firm had invested, have been identified, while the process to track down other properties is on. The process for attachment of the properties in Dubai will be initiated soon” said a senior ED official.
A PMLA (Prevention of Money Laundering Act) court last week rejected Agarwal’s bail petition after ED argued that he had diverted investors’ money to purchase properties in the Gulf. Agarwal, who has been remanded in judicial custody till November 7, is currently lodged in the Taloja Central Jail.
In July 2015, the Bombay High Court passed an order allowing authorities to sell off properties of ARK Imports to recover Rs 719.37 that it owes to the investors.
The firm is the second largest defaulter after NK Proteins, which failed to repay Rs 969.89 crore to investor, in the massive fraud. Earlier, Agarwal was arrested by the Economic Offences Wing of Mumbai police in August 2014 and granted bail a month later.
The NSEL scam came to light after the government in 2013, ordered the spot exchange to stop trading in some instruments, triggering a payment crisis. Following this, the exchange was forced to suspend trading and eventually down shutters, leaving over 13,000 investors in the lurch.
Most of the defaulters had promised that goods being traded were stored in various warehouses but it never existed. This led to major crisis in repayment of those who had invested in these stocks.
