The Enforcement Directorate (ED) on Friday submitted to a special court that its investigation has revealed that proceeds of crime in the Cox and Kings alleged money-laundering case is nearly Rs 7,000 crore. The ED claimed that the scope of the probe was expanded to include alleged siphoning and diversion of borrowed funds from different banks and financial institutions. Initially, the ED’s complaint alleged that the case involved proceeds of crime to the tune of Rs 5,564 crore. The claim was made by the ED while seeking custody of Peter Kerkar, the promoter of the travel firm arrested on Thursday.
The ED also claimed that loans were obtained by Kerkar in Cox and Kings Groups of Companies (CKG) from Yes Bank in connivance with Rana Kapoor, its founder and then promoter director. The ED claims that its probe showed that Yes Bank had a total outstanding of Rs 3,642 crore, of which Rs 1,997 crore were from three domestic entities and the rest from two overseas entities of CKG. A statement recorded of a senior employee of Yes Bank claims that a loan proposal amounting to Rs 500 crore of a subsidiary of the group, Ezeego Tours and Travels, was received.
“The loan was driven from the top and the very initial instruction had taken place between Rana Kapoor and the concerned person of the company,” the ED claimed. It said that the employee said that his team was against the proposal for extending facilities to CKG due to “weak credit position, compliance issue and non-availability to down sale the loan”.
It is claimed that Kerkar along with Anil Khandelwal, CFO, and Naresh Jain, auditor of Cox and Kings Ltd (CKL), “were responsible for inflating the books of accounts by showing 15 non-existent/fictitious customers.” The ED claimed that details of these 15 high-value customers were not available on the computer system of the company and their addresses were those of the friends of Kerkar and staff, employees of CKG. The agency also claimed that Kerkar in collusion with the Khandelwal made Sagar Deshpande, a finance executive with the company, who was found dead on railway tracks in suburban Mumbai, “submit false documents to Yes Bank showing nil liability of Axis Bank”. “This was done in order to obtain additional factoring facilities of Rs 150 crore from Yes Bank, which was otherwise not available,” the ED claimed.
The ED sought his custody stating that as a promoter Kerkar was directly involved and in-charge of the affairs of the group and claimed that he was an “active conspirator”. It was also alleged that Kerkar had not cooperated with the probe and his interrogation was necessary to gain information on alleged laundering of proceeds of crime from domestic as well as overseas entities. The ED also said that he is required to be confronted with statements recorded so far and find out the end-use of the alleged proceeds of crime. ED said that it had recorded the statements of employees of the companies.
Kerkar was sent to ED custody till December 3.
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