NSEL Reecovery Group

National Spot Exchange Limited was a platform for trading commodities and it came into news in the year 2013. It was due to the payment crisis happened on July 2013. The huge sum of Rs.5600crore was defaulted by the brokerage firms and defaulters. The issue came under scanner of the various agencies since then. Exchange was enforced to stop all trading activities & contracts.  After the payment crisis Securities Exchange board of India (SEBI), Investigating Agencies and NSEL had declared 22 members as NSEL Defaulters.

Investigation of these defaulters and brokers resulted in evidences where fraudulent transactions they made are reveled. According to NSEL and FTIL final merger order, it has been said that the outstanding amounts will be recovered from the selling defaulter’s assets. Hemce pursuing NSEL defaulters for recovery should be of chief importance.

NSEL has always been cooperating with all the investigating processes. They are willing to work with all parties to make sure complete resolution and has been continuously involved in recovery efforts. There has been various recovery efforts carried out by NSEL with the only focus to ensuring that genuine clients receive their claims. NSEL has taken efforts to affect recovery from defaulters. Recovery suits against all defaulters had been filed.

NSEL also lend a hand to Investigative Agencies in recovery process. Time to time NSEL had extended all assistance required to Economic Offences Wing (EOW), to discover & freeze assets of defaulters. Enforcement Directorate (ED) is supporting them to attach assets pertaining to defaulters. 


NSEL has been doing well in getting decrees on admission against 5 defaulters from the Bombay High Court to the sum of Rs. 1233.02 crores. NSEL has also been successful to obtained injunctions against the assets of defaulters from the Bombay High Court in respect of claims of Rs 4515.93 crores. A important part of the entire claim has therefore been secured and Rs 542.99 crores is already paid by NSEL. In view of foregoing, more than 100% of the claims of the traders are secured by way of decree, attachments and injunctions against defaulters. 

NSEL case : Kailash Aggarwal from ARK Imports behind bars

On the grounds of money laundering the Enforcement Directorate (ED) arrested a businessman from Ludhiana in NSEL case. On Friday the they decided to take the actions against Mr.Kailash Agarwal from ARK Imports who is one of the biggest defaulter in NSEL crisis.

The accused, Kailash Agarwal of ARK Imports, had allegedly looted Rs 719.21 crores from trading clients through the NSEL platform. It was his strategy to fool the trading clients by saying that he had stocked woollens of the same worth in his godown. Afterwards, he allegedly defaulted on payments. On Saturday, Aggarwal was produced before an ED court which sent him to the custody of the agency till September 29.

NSEL sources stated that, Aggarwal is among the key accused who is guilty for cheating 13,000 investors of Rs 5,600 crores in 2013. Anubhav Aggarwal, son of Kailash Aggarwal is absconding for a long time and he is currently living in Dubai. They have invested the NSEL’s defaulted money in real estate and most of the funds are diverted to overseas. It was realized that they assured the trading clients about having possession of trading commodities like wool, paddy, wheat, mustard oil at their warehouses at Ludhiana, Samrala and Nawanshahr. If found guilty he can be imprisoned for 7 years.

NSEL Defaulters and Defaulting Brokers

On July 31^st, 2013 the Rs.5600crore National Spot Exchange Ltd. (NSEL) crisis surfaced. The matter came under scanner of multiple agencies since then. Exchange was forced to shut down and suspend all its trading contracts.  After the payment crisis Regulatory Body, Investigating Agencies and NSEL had declared 24 members as NSEL Defaulters.

Brokerage firms involved in the NSEL crisis were also under the observation due to their fraudulent behavior. It came into light that some of the brokers gave promise of assured returns to the trading clients, which turned out to be wrong resulting into crisis. Corporate Affairs Ministry and other agencies including Enforcement Directorate (ED) have been investigating the defaulting brokers in the Rs.5600crore NSEL crisis case. SEBI was also been asked by government to take necessary action against these defaulting brokers.

Mr.Arun Jaitely the Finance Minister had told Lok Sabha that other than Corporate affairs Ministry Economic Offences Wing (EOW) and ED are also investigating the NSEL matter. EOW had attached properties of the accused worth Rs5757crore (approx.) and Rs.1222.89crore, 32 common properties had been attached by ED of Rs.740crore (approx.). Arun Jaitely in a written reply to Lok Sabha had said that SEBI is directed to examine and take necessary actions against defaulting brokers.

 In case of brokers various agencies are investigating into their role. It is proven in the audit report that defaulting brokerage firms named Anand Rathi Commodities, Geofin Comtrade, Motilal Oswal Commodities, India Infoline Commodities and Philip Commodities are guilty. SEBI with EOW and ED is investigating the role if these brokers in NSEL crisis Case.

Brokers at Fault

In the National Spot Exchange Ltd. (NSEL) crisis case trading clients had earlier complained about brokers alleging that they were involved in different fraudulent activities in regards to trading on the NSEL platform. Hence it was not surprising that the trading clients have now filed different cases against top five brokers for mis-selling and assuring them to invest in agriculture commodities.

It is in context with the Enforcement Directorate’s (ED) process of top officials of broking firms to establish their role in the 5,600 crore settlement crisis which broke out in July 2013. Some broking firms had considerably high exposure in NSEL. Among them were Anand Rathi with a 629 crore exposure, India Infoline Commodities with 326 crore exposure and Motilal Oswal Commodities with a 263 crore exposure. Phillip Commodities and JM Financial are both with a 140 crore and 90 crore exposure respectively. SEBI has also launched a probe into alleged mis-selling of products by some brokers with the assured returns from commodities traded on the NSEL and is looking into various complaints against brokers, including false assurances, inducements and parody, trading without proper authority from clients, misuse or illegal modification of unique client code, funding by NBFCs related to the brokers and non-receipt of payouts by clients.

Trading clients have filed recuperation cases in the Bombay High Court against Anand Rathi, India Infoline Commodities, Motilal Oswal Commodities and Phillip Commodities. Only time will tell if these trading clients will get justice in legal system or not. We can hope that they will receive justice in the least possible time, by putting full-stop to their long awaited suffering.