NSEL Scam: MPID court orders fund transfer from Lotus Refineries' account

On March 4, the court had attached 37 properties of ARK Imports and directed competent authority to fetch its market valuation

The Maharashtra Protection of Interest of Depositors (MPID) court has ordered transfer of Rs 12.74 crore from 27 bank accounts of Lotus Refineries Pvt Ltd to the account of the competent authority in the Rs 5,600 crore National Spot Exchange Ltd (NSEL) scam case.

The court has directed the Economic Offences Wing (EOW) of the Mumbai Police to ensure the transfer of funds efficiently. Having defaulted for the amount of Rs 252.48 crore, Arun Kumar Sharma, director of Lotus Refineries was arrested on November 11, 2013 and was released on bail after three months.

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"The court (MPID) has issued the order without considering our side of arguments. We filed an arbitration case last year against NSEL which is pending before the court. Also, all our accounts are blocked," said Sharma.

This year on March 4, MPID court had also attached 37 properties of ARK Imports Pvt. Ltd. and has directed the competent authority to fetch the market valuation of the property and file draft sale proposal. One of the largest defaulters with the outstanding liability of Rs 719.21 crores, trading in wool, is a sister concern of B R Spinners represented by the directors Kailash Agarwal and Anubhav Agarwal. Kailash was also arrested in August 2014 and released on bail in a month. At a recently conducted raw wool auction in Ludhiana, NSEL received three bids with the highest being and sold at Rs 0.40 crore.

The court rejected the application of Nimish Patel, chairman of N K Proteins Ltd, NSEL's largest defaulter of Rs 934.45 crore seeking his travel to the United States between May 3 and June 21. Patel's application was rejected on the suspicion raised by investigating agency of potential absconding of the defaulter.

"The suspicion, as raised by the investigating agency, pending further investigation cannot be said to be false and baseless. Applicant was also alleged to be arrested by belated stage. Permission is not sought for any bonafide purpose. Under above circumstances, I am of the view that application deserves to be rejected," Justice D P Surana, Special Judge, MPID Act and Additional Sessions Judge, City Civil Sessions Court, observed in his order.

Patel was arrested by the EOW on October 29, 2015 and later released on bail. EOW has attached various properties of N K Proteins including their plant at Kadi-Thor in Mehasana, Gujarat and Tirupati oil segment.

The EOW has also attached assets worth around Rs 5,000 crore of defaulting trading members and already secured recoveries worth Rs 1,233.02 crore through decrees on admission against five defaulters and through injunctions from a total of 18 defaulters with outstanding of Rs 4,515.93 crore.