A maze of dubious deals, offshore shell companies across the globe

New Delhi: In its ongoing money-laundering probe into the Yes Bank fraud case, the Enforcement Directorate has now revealed that debt-ridden Cox and Kings Group (CKG) and its group companies were granted loans of up to Rs 3,600 crore by the scam-hit bank, which was then allegedly diverted and siphoned off through onshore and offshore subsidiaries held across the globe.

ED officials on Monday conducted raids at five locations in Mumbai at the offices and residences of promoter Ajay Ajit Peter Kerkar, Pesi Patel, Abhishek Goenka, Anil Khandelwal and Naresh Jain. While Patel and Goenka are Directors in the CKG, Khandelwal was the Chief Financial Officer and Jain was the company's auditor, according to ED officials.

As per the investigation conducted by the financial probe agency so far, at least five subsidiary companies of CKG had built up a debt of around Rs 3,642 crore with Yes Bank by allegedly forging and falsifying records and documents to avail these loans from the then Rana Kapoor headed private lender.

The ED had registered its money laundering case based on the CBI's FIR which had accused Rana Kapoor of granting exorbitant loans and investments to Dewan Housing Finance Limited and the Wadhawans, in exchange for kickbacks worth around Rs 600 crore. ED officials here said that the probe, in that case, had led to the revelation of irregularities in loans granted by Yes bank to Cox and Kings as well.

The probe so far has shown that Malvern Travel Limited, UK, an entity of CKG had availed loans of Rs 493 crore from Yes Bank by allegedly forging bank statements from RBS bank, UK and SBI, UK and purportedly using forged end-use certificates of a UK-based statutory auditor. These facts were brought forward by KPMG, the administrator of the UK-based entity and ED officials have further alleged that Cox and Kings Limited (CKL) had allegedly forged its consolidated finances by purportedly forging the balance sheets of its overseas subsidiaries.

Moreover, an audit commissioned by Yes Bank after CKL defaulted on its loan of around Rs 563 crore had shown that the company had shown bogus sales worth over Rs 3,900 crore to 15 non-existent or fictitious entities and Ezeego (another CKG subsidiary) had collected a majority of these proceeds without allegedly reflecting it in bank statements. The ED went on to accuse Khandelwal, then CFO of CKL of diverting around Rs 1,100 crore to one Alok Industries Limited without board approval.

As far as Khandelwal is concerned, the agency also alleged that he had overseen a diversion of around Rs 150 crore from Ezeego to Redkite Capital Pvt Ltd, which is promoted by Khandelwal himself and Jain, who was CKL's internal auditor at the time. The agency also alleged that a large amount of this diverted fund was used to buy a controlling stake in Tourism Finance Corporation of India Limited an NBFC.

ED officials here added that CKG had sold a subsidiary company for Rs 4,387 crore and instead of fulfilling its liability to the bank had allegedly siphoned it off, of which USD 15.34 million had ended up in the accounts of Kuber Investments Mauritius Pvt Ltd, an entity, the ED believes in controlled by Kerkar himself.

Adding that an audit report by PWC had shown up to 147 other suspicious or non-existent customers of CKL, ED officials here said that another subsidiary of the group, Prometheon Enterprise Limited, UK had allegedly impersonated officials of Raffingers UK LLP to send its financial to India through a fake domain name. Officials added that Raffingers had, in fact, filed a criminal complaint against the company for this as well.

Rana Kapoor was arrested by the ED in March this year and Kerkar has been called for questioning by the agency in the case as well.