Yes Bank scam: ED carries out searches at 5 premises of Cox & Kings Group

The Enforcement Directorate (ED) has stepped up their investigation in the Yes Bank case. After filing a chargesheet in a Mumbai court, the agency conducted searches at five premises of promoter, directors, CFO and auditor of Cox and Kings Group (CKG) in Mumbai involved in Yes Bank fraud case of Rs 3642 crore.

According to the agency, the searches were carried out at the premises of Ajay Ajit Peter, Pesi Patel, Abhishek Goenka, Anil Khandelwal and Naresh Jain of CKG Mumbai in the Yes Bank fraud case under the provisions of Prevention of Money Laundering Act (PMLA), 2002. During the investigation, the agency found certain irregularities in relation to the loan sanctioned to Cox & Kings Group. The group, according to ED, had created multiple layers of onshore and offshore subsidiary across the globe through which the money was siphoned off.

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'Loan amount was defaulted' 

Sources in the agency say that multiple companies were floated that were used to siphon funds. Malvern Travel Limited, UK -- an entity of CKG - had an outstanding of Rs 493 crore and they allegedly used fraudulent bank documents to avail the loan from Yes Bank.

"This forgery was pointed out by KPMG which is the administrator of this UK based entity. In relation to Cox & Kings Limited (CKL), the company forged its consolidated financials by forging the balance sheets of the overseas subsidiaries. The same was informed to BSE/NSE by the resolution professional in writing. The statutory auditor of the Prometheon Enterprise Limited, UK (PEL- a subsidiary of CKG) was Raffingers UK LLP and the financials of PEL were sent to India by fictitious domain name impersonating the current officials of Raffingers UK LLP. For this, Raffingers UK LLP filed a criminal complaint to National Crime Agency, UK," read a statement released by the agency.

According to the findings of ED investigation, after the loan amount defaulted, the lenders appointed Pricewaterhouse Coopers (PWC) for forensic audit but the "management did not cooperate".

The agency maintains that PWC confirmed "falsification of accounts, overstating the sales figures and understating the debt figures, fictitious transactions etc. PWC reported that from Fiscal Year 15 to Fiscal Year 19, sales of Rs 3908 crore were made to 15 non-existent/fictitious customers. Majority of the collection shown in ledgers from Ezeego (another group entity) was not found in the bank statements. Another 147 sets of customers are also suspicious and not existent, as per the PWC report. As per the report, Anil Khandelwal, CFO of CKL diverted Rs 1100 Crore to Alok Industries Ltd without any approval of the board."

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The agency in its investigation found that CKG sold one of its subsidiary Holiday Break Education Limited, UK for Rs 4,387 crore but did not clear the liability of Yes bank. The agency suspects that the group siphoned off the majority of the money. "From this siphoning, USD 15.34 Million was transferred to Kuber Investment Mauritius Pvt Ltd which was controlled by Peter Kerker," read the ED statement.  

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