CBI takes over ₹525-crore loan default case against Cox & Kings | Mumbai news
MUMBAI: The Central Bureau of Investigation (CBI) has taken over the Mumbai police’s probe into an alleged ₹525-crore bank loan fraud case against the promoters and directors of travel company Cox & Kings and unidentified bank officials.
The police case was registered in June 2021 based on a complaint filed by the chief vigilance officer of Yes Bank at the time. The bank alleged that Cox & Kings, through its promoters and directors, defrauded it of ₹525 crore by cheating, forgery and diverting loan funds in connivance with unknown bank officials.
Following a request by the Maharashtra government, the CBI on Monday took over the case, which was registered against Cox & Kings’ promoters Ajay Ajit Peter Kerkar and Urrshila Kerkar, chief financial officer Anil Khandelwal, and directors Pesi Patel and Mahalinga Narayanan, along with unknown bank officials and others.
The accused were booked for allegedly submitting manipulated records to get credit facilities from Yes Bank. The charges included using forgery for the purpose of cheating, using as genuine a forged document or electronic record, and criminal misconduct by a public servant under relevant sections of the Indian Penal Code and Prevention of Corruption Act.
Cox & Kings, controlled by Ajay Kerkar and his family, was sent to bankruptcy court in October 2019 after it defaulted on payments. The travel and tours agency owed ₹5,500 crore to banks and financial institutions at the time. Yes Bank, under then co-founder Rana Kapoor, was one of the top lenders, with an exposure of more than ₹2,267 crore.
In October 2019, the National Company Law Tribunal (NCLT), which hears insolvency cases, appointed a resolution professional to take charge of all Cox & Kings’ assets and operations. This was after the company’s loan account at Yes Bank became a Non-Performing Asset (NPA) in August 2019, with a principal outstanding amount of ₹519.45 crore. It was subsequently classified as a Red-Flagged Account (RFA), according to the bank’s complaint.
A forensic audit of the travel firm later revealed alleged elements of fraud in the loan account. Yes Bank had reported the loan account as fraud to the Reserve Bank of India on the grounds of misrepresenting material facts in its financial statements. In March 2020, the bank wrote off the entire principal outstanding amount, which had ballooned to ₹525 crore including accrued interest.
When the credit facilities were sanctioned to Cox & Kings, Yes Bank had an outstanding exposure of ₹650 crore towards Ezeego One Travel & Tours, another company of the Cox & Kings Group, the complaint alleged.
Yes Bank’s co-founder Rana Kapoor was arrested in March 2020 after being accused of taking kickbacks to grant loans to several companies that eventually defaulted on repayments. He was released on bail in April this year.
