The investigation into the fraud loans issued by Yes Bank has led to the discovery of ‘fictitious customers’ used by Cox & Kings to launder thousands of crores it borrowed from Rana Kapoor’s bank. The Enforcement Directorate has discovered that Cox & Kings has at least 15 fictitious customers which the company used to siphon off money. The probe into 147 similar ‘non-existing customers’ is underway, an ED officer said.

The financial probe agency on Monday conducted searches at five premises of Ajay Ajit Peter, Pesi Patel, Abhishek Goenka, Anil Khandelwal and Naresh Jain, who are at senior positions in Cox & Kings Group, Mumbai and are being investigated in Yes Bank fraud case of Rs 3,642 crore under the provisions of Prevention of Money Laundering Act.

An amount of Rs 3,642 crore is outstanding against Cox & Kings Group. It includes Rs 563 crore loan in the name of Cox & Kings Ltd (CKL), India; Rs 1012 crore in the name of Ezeego One Travel & Tours Ltd (EOTTL), India; Rs 422 crore in the name of Cox & Kings Financial Services Ltd (CKFSL), India; Rs 1152 crore in the name of Prometheon Enterprise Limited, UK and Rs 493 crore in the name of Malvern Travel Ltd, UK.

According to the ED, during investigation in the Yes Bank case, irregularities were noticed in relation to the loan sanctioned to Cox & Kings Group. “Group had created multiple layers of onshore and offshore subsidiary across the globe through which the monies were siphoned off. Malvern Travel Limited, UK submitted the forged bank statement of RBS Bank, UK, State Bank of India, UK and forged end used certificates of a UK-based statuary auditor to avail the loan of Rs 422 crore from Yes Bank,” said the ED.

The ED claims that during their probe in Cox & Kings, based on the limited data available, the firm was found to be involved in falsification of accounts, overstating the sales figures and understating the debt figures and fictitious transactions.

The agency also found that from 2015 to 2019 sales of Rs 3908 crore was made to 15 non-existent and fictitious customers. “The majority of the collection shown in ledgers from Ezeego was not found in the bank statements. Another 147 sets of customers are also suspicious and non-existent, as per the audit report of Pricewaterhouse Coopers. As per the report, Anil Khandelwal, CFO of CKL diverted Rs 1100 crore to Alok Industries Ltd without any approval of the board,” said an ED official.

In another incident, the probe agency claims that Cox & Kings sold Holiday Break Education Limited, UK (HBEL), a subsidiary of their firm, for Rs 4387 crores and instead of discharging the liability of the bank, they 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,” added the ED official.

Yes Bank founder Rana Kapoor is under probe for sanctioning loans to dubious companies for personal benefit. The financial probe agency had registered a money laundering case against Rana Kapoor and others on March 7, 2020. He was arrested a day later and is in judicial custody.

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