The Enforcement Directorate (ED) has arrested Anil Khandelwal, CFO of Cox and Kings Group (CKG) and Naresh Jain, Internal Auditor of Cox and Kings Group under section 19 of the Prevention of Money Laundering Act, 2002 (PMLA) for alleged money laundering.

Following their arrest on October 6, both the accused were produced before the PMLA Special Judge and were granted seven days ED custody.

During investigations under PMLA, it was allegedly found that Yes Bank had a total outstanding of Rs 3,642 crore with M/s Cox & Kings Group of Companies. Further, investigations revealed that CKG may have forged it's consolidated financials by manipulating balance sheets of overseas subsidiaries to secure the loan.

Moreover, certain board resolutions submitted to the bank for sanctioning of loans were allegedly found to be forged. According to the Enforcement Directorate (ED), the loan sanctioned by Yes Bank was driven by then CMD Rana Kapoor. ED has said that it has gathered evidence of Rana Kapoor giving instructions to bank officials to continue the loan and not make efforts to recover it.

ED claimed that during investigations it found between FY2015 and FY2019, sales of Rs 3,908 crore was allegedly made to 15 non-existent/fictitious customers. It said that a majority of collection shown in ledgers from Ezeego (another group entity of CKG) was not found in the bank statements. Moreover, it said there were fictitious 15 high value debtors reflected in the book of accounts. Another 147 set of customers appeared to be suspicious and/or not existent, the ED claimed.

Cox & King Limited (CKL), according to ED allegedly diverted Rs 1,100 crore to another stressed company, which has no business relation with it, without the approval of the board.

During the entire process, it is alleged that Khandelwal and Jain allegedly acquired mortgaged property amounting to Rs 63 crore in an owned business entity called M/s Reward Business Solutions without paying any money from their pockets.

The ED further claimed that Khandelwal and Jain had purchased various immovable properties from funds diverted from Cox & Kings Group. Around some Rs 150 crore was diverted from Ezeego to Redkite Capital Private Limited, which was promoted by family members of Khandelwal and Jain.

The ED has alleged that bank transactions of Cox & Kings Group do not match the book of accounts and Khandelwal and Jain, which may have been created to camouflage the fraud.

First Published:Oct 6, 2020 9:58 PM IST