The CKG group and its promoter came under the ED scanner when the agency started investigating the books of YES Bank
and its top borrowers. During the probe, the ED came across lenders’ enquiry against the tour firm and found that in October 2018, a year before it went bust, CKL sold its education tour business in Europe for 467 million pounds (Rs 4,387 crore), with the stated aim of reducing debt and maximising shareholder returns. But the sale proceeds were not actually used to repay bank loans and was instead, allegedly, siphoned off by the promoters.
Based on the enquiry, in August 2019, the lenders appointed audit firm PwC to examine the CKL accounts. The auditor highlighted siphoning off of funds to the tune of Rs 21,000 crore to dozens of so-called related parties.
Cox & Kings, promoted by Kerkar, his family and a few of their firms — was sent to the bankruptcy court in October 2019 after it defaulted on payments. However, Kerkar had alleged that the transactions were falsified by the company CFO and his team.
ED also found a merit in the allegations as it found in its initial probe that Khandelwal and Jain allegedly created disparities in the books of the travel firm between 2014-15 (FY15) and FY19.
Further, the investigation allegedly revealed that CKG forged its consolidated financials by manipulating the balance sheets of its overseas subsidiaries. Even the board resolution submitted to the private lender for sanctioning credit was allegedly found to be forged.
According to the ED, the sanction of the loan was driven by YES Bank’s former CEO and MD Rana Kapoor. He had given clear instructions to his employees to let the loan continue and not make efforts for recovery. The ED also found that between FY15 and FY19, sales of Rs 3,908 crore were allegedly made to 15 fictitious customers. A majority of the collections was shown in the ledger of Ezeego, a group firm of CKG. Another 147 customers also appeared to be non-existent, according to the findings of the ED probe.