NSEL's Second-Biggest Defaulter: The Ark Imports Case
When the National Spot Exchange collapsed in 2013, a Ludhiana-based trading firm owed more on paper than almost anyone else in the ₹5,600 crore default — a debt still tied up in criminal proceedings and a company-wide settlement more than a decade later.
The Promise
“Contracts traded on the National Spot Exchange will be backed by genuine, collateralised commodity stock, with paired forward contracts settled as scheduled by exchange members.”
— Ark Imports Pvt Ltd, a Ludhiana-based trading firm and NSEL member, Borrower/trading member on NSEL's paired forward-contract structure · 31 July 2013
Ark Imports was one of several NSEL members whose paired long-short contracts are alleged to have functioned as unsecured borrowing rather than trades backed by real commodity stock, mirroring the broader pattern regulators found across NSEL's defaulting members.
The Standard
Full and timely settlement of paired forward-contract obligations on maturity, backed by verified, collateralised commodity inventory as NSEL's exchange structure required.
NSEL's own contract and settlement rules, and Forward Contracts (Regulation) Act norms applicable to the exchange.
In force from 31 July 2013
The Reality
NSEL suspended trading on 31 July 2013 after failing to meet payment obligations to traders; on 26 August 2013, NSEL filed a criminal complaint naming five of its largest defaulting members, including Ark Imports, alongside NK Proteins, Lotus Refineries, Vimladevi Agrotech, and Yathuri Associates. Ark Imports' promoter, Kailash Baburam Agarwal, owed ₹719.37 crore — the second-largest individual exposure in the NSEL default after NK Proteins. Mumbai's Economic Offences Wing arrested Agarwal on 11 August 2014; he was released around a month later. The Enforcement Directorate separately arrested him again in September 2016 under money-laundering law, and a special PMLA court rejected his bail plea in October 2016, with the ED also freezing 23 bank accounts linked to him and his family. Separately, in a development affecting recovery across the whole NSEL default, 63 Moons Technologies (formerly Financial Technologies, NSEL's parent) reached a ₹1,950 crore one-time settlement with claimants in March 2025, which the Mumbai bench of the NCLT approved in November 2025 — though this settlement is distinct from, and does not resolve, the criminal cases against individual defaulters like Ark Imports.
As of 28 November 2025
The Gap
Bars share a single zero-based scale. No axis truncation is used to exaggerate or minimize the gap between the two figures.
Timeline
- StatusNSEL suspends trading
The exchange halts trading after failing to meet payment obligations to traders across its defaulting members.
- MilestoneNSEL names five largest defaulters
A criminal complaint names Ark Imports alongside NK Proteins, Lotus Refineries, Vimladevi Agrotech, and Yathuri Associates.
- StatusKailash Agarwal arrested
Mumbai's Economic Offences Wing arrests Ark Imports' promoter; he is released roughly a month later.
- StatusED arrests Agarwal again
The Enforcement Directorate arrests him under money-laundering law in connection with the NSEL case.
- StatusBail rejected
A special PMLA court rejects Agarwal's bail plea; the ED had earlier frozen 23 bank accounts linked to him and his family.
- RevisionNCLT approves ₹1,950 crore NSEL-wide settlement
63 Moons Technologies' one-time settlement with NSEL claimants is approved, though this is separate from the criminal case against Ark Imports specifically.
Legal Status
This is a stub entry. Criminal proceedings against Ark Imports' promoter under both the Economic Offences Wing's case and the Enforcement Directorate's money-laundering case have continued for over a decade; this investigation has not established a final trial verdict.
Arrested by Mumbai EOW in August 2014 (released about a month later) and again by the ED in September 2016; a special PMLA court denied him bail in October 2016. This investigation has not confirmed a final trial verdict.
Verdict
Preliminary verdict, pending fuller research: Ark Imports' ₹719.37 crore exposure, its promoter's two arrests, and the broader 2025 NSEL-wide settlement are documented. This investigation has not established the current status of Agarwal's trial or how much, if anything, has been recovered specifically from Ark Imports.
This entry draws on NSEL-defaulter profile pages and contemporaneous reporting on the arrests and bail rejection; it has not independently reviewed court filings or the EOW/ED chargesheets, and could not confirm the case's most recent procedural status beyond the 2025 NSEL-wide settlement.
What remains incomplete
- This is a stub entry. The current status of Kailash Agarwal's trial, over a decade after his first arrest, has not been researched in detail.
- It is not established how much, if any, of Ark Imports' ₹719.37 crore obligation has been recovered specifically, as distinct from the 2025 NSEL-wide settlement.
- The relationship between the 63 Moons/NSEL settlement and any ongoing criminal case against Agarwal has not been clarified.
Sources
Cited via search-result summary of contemporaneous reporting; this investigation has not directly reviewed the NCLT order.
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