Former directors of Cox & Kings under Mumbai Police scanner

The role of the erstwhile directors of the now-insolvent Cox & Kings (India) is under the scanner of the Mumbai police, which is probing the bankrupt travel and tour group for allegedly defrauding banks and other financial institutions.

The city police had earlier arrested the promoter, Ajay Ajit Peter Kerkar, and former chief financial officer Anil Khandelwal, who are now in jail in the case.

People in the know said the police have found certain instances of “omission and commission” by the former directors that allegedly facilitated the arrested promoter to siphon off funds through subsidiaries and even park the money in offshore firms.

“These former directors are required to explain multiple transactions which were fraudulent. However, the same remained unopposed and helped the arrested promoter to siphon off funds,” said a senior official, requesting anonymity.

The police are awaiting the report of a forensic audit of the company that would help them ascertain the financial trail. They have hired Ernst & Young to carry out the audit.

“The report is expected within a month’s time,” the official said.

The group is being probed by multiple agencies including the Enforcement Directorate, the Serious Fraud Investigation Office and the income-tax department.

According to a recent expose by the ICIJ, the arrested promoter, Kerkar, owns two BVI trusts and is connected to at least half a dozen offshore firms.

Cox & Kings owes ₹5,500 crore to banks and financial institutions and was one of the top borrowers of Yes Bank, who is one of the complainants in the case being probed by the Mumbai police. Yes Bank had alleged that between 2015 and 2018, Kerkar availed of loans from the bank by submitting fake documents. These loans were never utilised for the stated purposes, it had alleged.

While Yes Bank founder Rana Kapoor, who is now in jail, hasn’t been named in the Cox & Kings case, a Mumbai police official had said that they would investigate if he in any way helped Kerkar to get the loans sanctioned when he was at the helm at bank.

In its prosecution complaint, the ED had alleged that at least 71 loans totalling more than ₹31,855 crore approved by Yes Bank during Kapoor’s tenure had turned bad.

People in the know said while the defaulters of Yes Bank were being probed by the CBI and ED, the bank registered a case with the city police after the Maharashtra government denied giving general sanction to the CBI to probe the case. It is learnt that the state, while denying approval, informed the CBI that the city police were probing Kerkar in other frauds and could probe this case too.

A general consent is a must for the CBI to register an offence in the state and in its absence, the federal agency has to approach the local government on a case-to-case basis seeking permission to conduct investigation.

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