The Enforcement Directorate (ED) on Tuesday arrested the former CFO and internal auditor of the Cox and Kings Group in connection with its money laundering probe in the Yes Bank alleged loan default case.
The agency said ex-chief financial officer Anil Khandelwal and internal auditor Naresh Jain were arrested under the provision of the Prevention of Money Laundering Act (PMLA).
Both the accused were produced before a local court that sent them to seven days ED custody, it said in a statement.
It had also searched the residential premises of the two former executives of the company in Mumbai in June this year.
The beleaguered tours and travels company had told the BSE, post these raids, that the action was carried out by the ED at the residential premises of the suspended directors of the company and erstwhile key managerial personnel (KMP) who all have resigned from the company.
These raids were carried out by the ED in the matter of loan availed by the company from Yes Bank under the tenure of the board of directors, which are now suspended due to commencement of corporate insolvency resolution process, it had said.
The central probe agency said its probe found that Yes Bank had a total outstanding of Rs 3,642 crore against Cox & Kings Group of Companies (CKG).
It alleged that the two executives "purchased various immovable properties from the funds diverted from Cox & Kings Group".
"CKG forged its consolidated financials by manipulating the balance sheets of overseas subsidiaries.
“In addition, some board resolutions submitted to banks for sanctioning the loans were also found to be forged," the ED claimed.
Probe revealed that the loan sanction from Yes Bank was driven by then CMD Rana Kapoor and was given "bypassing" the norms, it said.
"The ED gathered the evidences regarding clear instruction of Rana Kapoor to the concerned bank officials to get the said loan continued and not to take efforts to recover it," it alleged.
"During the financial year 2015-2019, sales of Rs 3,908 crore were made to 15 non-existent/fictitious customers."
“Majority of collection shown in ledgers from Ezeego (another group entity of CKG) was not found in the bank statements. Also, there are fictitious 15 high value debtors reflected in the books of accounts," the ED said.
Another 147 sets of customers, it said, also "appeared to be" suspicious and non-existent.
"Cox & King Limited (CKL) has diverted Rs 1,100 crore to another stressed company without any approval of board which has no business relationship with the company."
"During this entire process, Khandelwal and Jain acquired the mortgaged property amounting to Rs 63 crore to their owned business entity Reward Business Solutions without paying a penny from their pocket," the agency said underlining the role of the two arrested accused.
Probe found that from Ezeego, Rs 150 crore were diverted to Redkite Capital Private Limited which was promoted by family members of Khandelwal and Jain, it said.
"Investigation conducted so far has revealed that the bank transactions of Cox and King Group are not matching with the books of accounts and Khandelwal and Jain created disparities between the books of accounts and the bank statements to camouflage the fraud," it said.
Yes Bank co-promoter Rana Kapoor and and DHFL promoters Kapil Wadhawan and Dheeraj Wadhawan have been arrested in this case by the ED early this year and they are in judicial custody at present.
The ED had booked Kapoor, his family members and others under the PMLA after studying a CBI FIR that alleged that dubious multi-crore loans were given by Yes Bank to various entities in contravention of the law and in lieu of purported kickbacks given to the Kapoor family.
Photograph: Amit Dave/Reuters
