NSEL case: ED rejects bail of Kailash Agarwal

The special ED (Enforcement Directorate) court on Friday rejected bail plea of Kailash Agarwal, director of Ludiana-based ARK Imports, in the Rs 5600 crore payment default at National Spot Exchange Ltd (NSEL) case.

ED had arrested Agarwal on September 23 for his company ARK Imports defaulting payment of NSEL. With Rs 719.42 crore of payment obligation, ARK Imports is the second largest defaulter in NSEL case after N K Proteins with over Rs 969.89 crore of default as of October 20.

Hearing the case Justice Ajay Dinode of the PMLA (Prevention of Money Laundering Act) court rejected the bail plea of Agarwal. The bail plea was moved by Rizwan Merchant appearing for Agarwal.

Incorporated in 2011, ARK Imports was promoted by three individuals Anubhav Agarwal, Rajni Agarwal and Kailash Agarwal (the first letters of the names are 'ARK'), with Anubhav holding 98 per cent.

After the arrest, Agarwal was brought to Mumbai from Ludiana and was sent for ED custody. Agarwal was sent to judicial custody later which is due to expire on November 7.

According to sources in the know, Agarwal has purchased immovable properties in Dubai perhaps by using NSEL money. ED is in the process to attach Agarwal's overseas properties including the one in Dubai, sources said.

This is the second time Agarwal was arrested by the enforcement agency in the NSEL case. He was earlier arrested by the Economic Offences Wing (EOW) of the Mumbai Police on August 11, 2014 and released later on bail on September 11, 2014.

Informed sources said EOW has already filed a bail cancellation application in the special MPID (Maharashtra Protection of Interest of Depositors) court. Meanwhile, the enforcement agencies have frozen 23 accounts in various banks operated directly by Agarwal and indirectly through his family members.

The 22 defaulters including ARK Imports had admitted before the erstwhile markets regulator Forward Markets Commission (now merged with Sebi) that they were liable to pay the amount.

On July 20, judge S J Kathawala of the Bombay High Court passed a decree on admission for an amount of Rs 719.37 crore in the case of ARK. With this, the total default amount against which the court has issued decrees stands at Rs 1,233.02 crore.