The Enforcement Directorate on Tuesday arrested Anil Khandelwal, chief financial officer of global tours and travel company Cox and Kings Group (CKG) in connection with the Yes Bank money laundering probe, the agency said in a statement. Besides Khandelwal, the agency also arrested Naresh Jain, the group’s internal auditor. The arrests have been made under section 19 of the Prevention of Money Laundering Act, 2002 (PMLA).
Both the accused were produced before the Special Judge (PMLA) and were granted seven days of ED custody. The ED had claimed that the firm defaulted on loan payments worth Rs 3,642 crore. During the seven-day custody, ED officials intend to grill the two in relation with the irregularities and collect more evidence.
Earlier this year, the ED conducted raids at premises belonging to the senior management of Cox and Kings Group (CKG) in connection with the money laundering probe.
On March 8, the agency arrested the bank’s former chairman and managing director Rana Kapoor. The travel company was sent to bankruptcy court last year in October after defaulting on payments to the bank. The ED had been scanning its transactions to its borrowers.
PMLA investigation in the Yes Bank case revealed that the CKG forged it’s consolidated financials by manipulating the balance sheets of overseas subsidiaries. Besides, some board resolutions submitted to banks for sanctioning the loans were also found to be forged.
“Further investigation revealed that the loan sanction from Yes bank was driven by Kapoor and was given bypassing the norms. The ED gathered the evidence regarding Kapoor’s direction to the concerned bank officials to get the said loan continued and not to take efforts to recover it,” the agency statement noted.
As per the investigation, sales worth Rs 3,908 crore was made to 15 non-existent/fictitious customers during the financial years (FY) 2015 to 2019. Majority of collection shown in ledgers from Ezeego (another group entity of CKG ) was not found in the bank statements.
It was also found that fifteen fictitious high-value debtors reflected in the books of accounts. Another 147 sets of customers also appeared to be suspicious and not existent.
The group was found to have diverted Rs 1,100 crore to another company without any approval of the board. It was also found that Khandelwal and Jain acquired the mortgaged property amounting to Rs 63 crore in their owned business entity named M/s Reward Business Solutions without paying a penny from their pocket.
The agency stated that the duo had also purchased various immovable properties from the funds diverted from the group.
“Investigation conducted so far has revealed that the bank transactions of Cox and King Group are not matching with the books of accounts and Anil Khandelwal and Naresh Jain creating disparities between the books of accounts and the bank statements to camouflage the fraud. Further investigation is in progress,” the press statement added.