Updated: January 19, 2022 8:07:06 am
An investigation by the Economic Offences Wing (EOW) of Mumbai police has found that as early as 2010, Cox & Kings Ltd allegedly created 15 fake travel agent companies, opened bank accounts for each, secured PAN numbers and sold tickets to them only on paper for two years to hide the poor financials of Cox & Kings and its subsidiaries.
It has found that these 15 fake customers were used to rotate funds between Cox & Kings and its subsidiary Ezeego One Travels and Tours Pvt Ltd and to reduce the pending dues of Ezeego, a loss-making entity, in the books of Cox & Kings. In 2010, Cox & Kings raised Rs 300 crore through global depository receipts at the London Stock Exchange.
In April 2020, The Indian Express, in a series of stories, reported how a forensic audit found that the travel company undertook related party transactions worth Rs 21,000 crore over four years (2015-2019) to siphon off funds. It also found that Cox & Kings had falsified records, booked sales worth Rs 9,000 crore to over 160 customers who are bogus or don’t exist and inflated bank balances.
The latest findings of the EOW form part of a report submitted by the agency in court for closure of a case filed by the promoter of Cox & Kings, Peter Kerkar, against the company’s chief financial officer Anil Khandelwal, several employees, and officials of banks that lent to Cox & Kings. Both Kerkar and Khandelwal are currently behind bars in connection with a money laundering case the Enforcement Directorate (ED) is investigating.
Best of Express Premium
“We are yet to receive the entire copy of the report along with the findings of the EOW investigation. What has been given so far is a letter to our client informing the closure of the case. Once we get all the documents we will file a protest petition against the EOW report,” said Kerkar’s lawyers Dharmesh Joshi and Parag Joshi from T. D. Joshi & Associates.
The EOW, in its investigation report, said that a forensic audit ordered by it on Cox & Kings has found that between 2013 and 2019, at least Rs 5,911.32 crore has been transferred from the travel firm to companies where Peter Kerkar has “direct interest”.
The agency alleged that Cox & Kings took corporate credit cards in the name of five of its employees and used it to buy tickets from its subsidiary Ezeego. This money received by Ezeego from the sale of tickets to Cox & Kings was then returned to the latter against past dues. Cox & Kings subsequently used the money to clear the bills of the corporate credit cards that were used to buy tickets.
The probe report said that in March 2019, one such Cox & Kings credit card issued by IndusInd Bank was “swiped at Ezeego which turned the money over to Cox & Kings with Cox & Kings reimbursing about Rs 525 crore to IndusInd Bank”.
“As a result the Cox & Kings balance sheet of 2018-19 showed a substantial bank balance and IndusInd had the same amount of deposits. Immediately thereafter on April 2, 2019, the bank diverted this amount to repayment of their limit,” said the EOW report.
The agency has alleged that promoters Peter Kerkar and Urrshila Kerkar were aware of the manipulation of these accounts. Cox and Kings owes Rs 5,500 crore to banks and financial institutions. The company was sent to bankruptcy court in October 2019 after it defaulted on payments.
🗞 Subscribe Now: Get Express Premium to access our in-depth reporting, explainers and opinions 🗞️
- The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.