borrowed Rs 563 crore; its group firms Ezeego and Cox & Kings Financial Service borrowed Rs 1,012 crore and Rs 422 crore, respectively. Its two UK-based entities — Prometheon Enterprise and Malvern Travel — owe dues of Rs 1,152 and Rs 493 crore each.
The ED action was triggered after it got custody of some crucial documents and audit reports highlighting the roles of Cox & Kings promoter, executives, and its entities.
Findings says Malvern Travel, with an outstanding of Rs 493 crore, submitted the forged bank statement and certificates of BDO LLP (statutory auditor) to avail of the said loans from YES Bank. This forgery was pointed out by KPMG, which is the administrator of this UK-based entity.
In relation to Cox & Kings, the company forged its consolidated financials by counterfeiting the balance sheets of overseas subsidiaries.
Even Prometheon Enterprise uses the fictitious domain name impersonating the current officials of Raffingers UK LLP, (statutory auditor). For this, Raffingers UK LLP filed a criminal complaint to the National Crime Agency in the UK.
After default by Cox & Kings, the lenders appointed PwC for forensic audit, but the management did not cooperate. However, based on the limited data available, the audit confirmed falsification of accounts, overstating sales figures, understating debt figures, fictitious transactions and so on.
The audit highlighted that between 2014-15 and 2018-19, sales of Rs 3,908 crore were made to 15 non-existent/fictitious customers.
A majority of 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 non-existent. The audit further says Anil Khandelwal diverted Rs 1,100 crore to Alok Industries without any board approval.
Cox & Kings Group sold Holiday Break Education, another subsidiary, for Rs 4,387 crore. Instead of discharging liability of the bank, it siphoned off a majority of the money. From this siphoning, $15.34 million was transferred to Kuber Investment Mauritius, which was controlled by Peter Kerker.
From Ezeego, Rs 150 crore was diverted to Redkite Capital Private, which was promoted by Anil Khandelwal and Naresh Jain (internal auditor of Cox & Kings). This fund diverted to Redkite was used to buy controlling stake in Tourism Finance Corporation of India, a listed non-banking financial company.