The Enforcement Directorate (ED) on Monday conducted searches at five premises of promoters, directors, CFO and auditor of Cox & Kings Group (CKG) in Mumbai in a money laundering case in connection with Rs 3,642 crore Yes Bank fraud probe.
The searches were conducted at the premises of Ajay Ajit Peter, Pesi Patel, Abhishek Goenka, Anil Khandelwal and Naresh Jain Promoter/Directors/CFO/auditor of Cox & Kings Group in Mumbai under the provisions of Prevention of Money Laundering Act (PMLA), the ED said.
The outstanding loans to the tune of Rs 3,642 crore of Cox & Kings Group companies include Rs 563 crors against Cox & Kings Ltd., India. Rs 1,012 crore of Ezeego One Travel &Tours Ltd., India, Rs 422 crore of Cox & Kings Financial Services Ltd., India, , Rs 1,152 crore of Prometheon Enterprise Ltd, UK and Rs 493 crore of MALVERN Travel Ltd., UK.
The ED had recorded a money laundering case against Yes Bank promoter Rana Kapoor and Others on March 7 this year under PMLA, on the basis of an FIR registered by Central Bureau of Investigation (CBI) under IPC Sections relating to criminal conspiracy and cheating besides the provisions of Prevention of Corruption Act.
In the CBI FIR, it was alleged that during April to June, 2018, Yes Bank Limited had invested Rs 3,700 crores in the short term debentures of Dewan Housing Finance Corporation Ltd (DHFL).
Simultaneously, Kapil Wadhawan, MD of DHFL paid a kickback of Rs 600 crores to Rana Kapoor and his family members in the garb of loan given by DHFL to DOIT Urban Ventures (India) Pvt. Ltd (Rana Kapoor Group Company). In addition to the above, Yes Bank Ltd. had also sanctioned a loan of Rs 750 Crore to one of the RKW Developers Group company beneficially owned by Kapil Wadhawan, Dheeraj Wadhawan and their family members. This loan of Rs 750 crore was siphoned off by Kapil Wadhawan and Dheeraj Wadhawan through their shell companies and it was never used for the declared purpose.
“Investigation conducted under PMLA revealed the role of Rana Kapoor in money laundering and therefore he was arrested by ED on March 8 and he is in judicial custody now. During investigation, irregularities were also noticed in relation to the loan sanctioned to Cox & Kings Group which had created multiple layer of onshore and offshore subsidiary across the globe through which the monies were siphoned off. A formal complaint in this regard was filed on 18.03.2020 by Yes Bank,” the ED said in a statement.
Malvern Travel Limited, UK (an entity of CKG) was having outstanding of Rs 493 crores which submitted the forged bank statement of RBS Bank, UK, State Bank of India, UK and forged end use certificates of BDO LLP ( Statuary Auditor of the UK based Entity) to avail the said loan from Yes Bank, the agency said.
This forgery was pointed out by KPMG which is the administrator of this UK based entity. In relation to CKL, the company forged its consolidated financials by forging the balance sheets of the overseas subsidiaries. The same was informed to BSE/NSE by the resolution professional in writing. The statutory auditor of the Prometheon Enterprise Limited, UK (PEL- a subsidiary of CKG) was Raffingers UK LLP and the financials of PEL were sent to India by fictitious domain name impersonating the current officials of Raffingers UK LLP. For this, Raffingers UK LLP filed a criminal complaint to National Crime Agency, UK.
After default by CKL, the lenders appointed PWC for forensic audit but the management did not cooperate. However, based on the limited data available with them, PWC confirmed falsification of accounts, overstating the sales figures and understating the debt figures and fictitious transactions among others.
PWC reported that from financial year 2015 to 2019, sales of Rs 3,908 crores were made to 15 nonexistent/fictious customers. Majority of collection shown in ledgers from Ezeego (another group entity) was not found in the bank statements. Another 147 sets of customers are also suspicious and not existent, as per PWC report. As per the report, Anil Khandelwal, CFO of CKL diverted Rs 1,100 crore to Alok Industries Ltd without any approval of the Board.
CKG sold Holiday Break Education Limited, UK (HBEL) a subsidiary of CKG for Rs 4,387 crores and instead of discharging the liability of bank; they siphoned off majority of the fund. From this siphoning, USD 15.34 Million was transferred to Kuber Investment Mauritius Pvt Ltd which was controlled by Peter Kerker.
From Ezeego, Rs 150 crores were diverted to Redkite Capital Private Limited which was promoted by Anil Khandelwal, CFO of CKL and Naresh Jain (Internal Auditor of CKL). This fund diverted to Redkite was used to buy controlling stake in Tourism Finance Corporation Of India Ltd, a listed NBFC, the agency added.