Mumbai: The current management at Yes Bank has written to the Central Bureau of Investigation, alleging payment of kickbacks and laundering of money related to loan transactions with the Cox & Kings Group (CKG), people in the know said.
The irregularities were found during a financial audit of the bank carried out by PricewaterhouseCoopers, they said.
The CBI is likely to register a fresh FIR against Yes Bank cofounder and former chief executive Rana Kapoor, the borrower and others, the people told ET.
“A complaint has been sent to the CBI regarding misappropriation of loan funds by the borrower … The bank also has to declare the account as fraud,” a person in the know said on the condition of anonymity.
Yes Bank did not respond to an email seeking comment.
The Enforcement Directorate (ED), which is already probing allegation of money laundering in this loan deal, had conducted searches at the premises of Cox & Kings India promoter Ajay Ajit Peter Kerkar, former directors Pesi Patel and Abhishek Goenka, former finance chief Anil Khandelwal and auditor Naresh Jain.
According to the ED, the travel services company had borrowed Rs 3,642 crore from the private lender.
Cox & Kings is currently undergoing corporate insolvency resolution process. Its resolution professional, Ashutosh Agarwala, had informed the stock exchanges earlier this month that no raids were carried out in the company’s official premises. The raids were related to a loan taken by the company from Yes Bank during the tenure of the now-suspended board, Agarwala had said.
Yes Bank had ordered the audit after the borrower defaulted on the payment, said an official privy to the matter.
“The auditor has found that the borrower had created multiple layers of onshore and offshore subsidiaries across the globe through which the monies were siphoned off,” he said. “The report is being studied and a decision will soon be taken if a fresh FIR should be registered in the case.”
The CBI had previously registered cases against some other borrowers from Yes Bank, including Dewan Housing Finance and the Avantha group. Last week, the agency submitted its first charge sheet in a case alleging criminal conspiracy between Kapoor and Dewan Housing Finance promoters Kapil and Dheeraj Wadhawan to sanction loans.
According to the probe conducted by the ED, the erstwhile management at Cox & Kings did not cooperate during the financial audit. “However, based on the limited data available with them, PwC confirmed falsification of accounts, overstating the sales figures and understating the debt figures, fictitious transactions, etc.,” it said.
Dwelling on the fraud caused to Yes Bank, ED’s probe has revealed that Malvern Travel Limited, UK (an entity of CKG) was having an outstanding of Rs 493 Crores allegedly submitted forged bank statement of RBS Bank, UK, State Bank of India, UK and forged end use certificates of BDO LLP (statutory auditor of the UK based entity) to avail the said loan from Yes Bank.
“In relation to CKL, the company forged its consolidated financials by forging the balance sheets of the overseas subsidiaries. The same was informed to BSE/NSE by the resolution professional in writing. The statutory auditor of the Prometheon Enterprise Limited, UK (PEL- a subsidiary of CKG) was Raffingers UK LLP and the financials of PEL were sent to India by a fictitious domain name impersonating the current officials of Raffingers UK LLP. For this, Raffingers UK LLP filed a criminal complaint with the National Crime Agency, UK,” the ED said.
The agency has also found that CKG sold Holiday Break Education Limited, UK (HBEL) a subsidiary of CKG 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.
In another suspicious transaction, Rs 150 Crores were diverted to Redkite Capital Private Limited, a company promoted by Anil Khandelwal, CFO of CKL and Naresh Jain (Internal Auditor of CKL) from Ezeego, another entity of CKG. “...This fund diverted to Redkite was used to buy a controlling stake in Tourism Finance Corporation Of India Ltd, a listed NBFC,” the ED added
The irregularities were found during a financial audit of the bank carried out by PricewaterhouseCoopers, they said.
The CBI is likely to register a fresh FIR against Yes Bank cofounder and former chief executive Rana Kapoor, the borrower and others, the people told ET.
“A complaint has been sent to the CBI regarding misappropriation of loan funds by the borrower … The bank also has to declare the account as fraud,” a person in the know said on the condition of anonymity.
Yes Bank did not respond to an email seeking comment.
The Enforcement Directorate (ED), which is already probing allegation of money laundering in this loan deal, had conducted searches at the premises of Cox & Kings India promoter Ajay Ajit Peter Kerkar, former directors Pesi Patel and Abhishek Goenka, former finance chief Anil Khandelwal and auditor Naresh Jain.
According to the ED, the travel services company had borrowed Rs 3,642 crore from the private lender.
Cox & Kings is currently undergoing corporate insolvency resolution process. Its resolution professional, Ashutosh Agarwala, had informed the stock exchanges earlier this month that no raids were carried out in the company’s official premises. The raids were related to a loan taken by the company from Yes Bank during the tenure of the now-suspended board, Agarwala had said.
Yes Bank had ordered the audit after the borrower defaulted on the payment, said an official privy to the matter.
“The auditor has found that the borrower had created multiple layers of onshore and offshore subsidiaries across the globe through which the monies were siphoned off,” he said. “The report is being studied and a decision will soon be taken if a fresh FIR should be registered in the case.”
The CBI had previously registered cases against some other borrowers from Yes Bank, including Dewan Housing Finance and the Avantha group. Last week, the agency submitted its first charge sheet in a case alleging criminal conspiracy between Kapoor and Dewan Housing Finance promoters Kapil and Dheeraj Wadhawan to sanction loans.
According to the probe conducted by the ED, the erstwhile management at Cox & Kings did not cooperate during the financial audit. “However, based on the limited data available with them, PwC confirmed falsification of accounts, overstating the sales figures and understating the debt figures, fictitious transactions, etc.,” it said.
Dwelling on the fraud caused to Yes Bank, ED’s probe has revealed that Malvern Travel Limited, UK (an entity of CKG) was having an outstanding of Rs 493 Crores allegedly submitted forged bank statement of RBS Bank, UK, State Bank of India, UK and forged end use certificates of BDO LLP (statutory auditor of the UK based entity) to avail the said loan from Yes Bank.
“In relation to CKL, the company forged its consolidated financials by forging the balance sheets of the overseas subsidiaries. The same was informed to BSE/NSE by the resolution professional in writing. The statutory auditor of the Prometheon Enterprise Limited, UK (PEL- a subsidiary of CKG) was Raffingers UK LLP and the financials of PEL were sent to India by a fictitious domain name impersonating the current officials of Raffingers UK LLP. For this, Raffingers UK LLP filed a criminal complaint with the National Crime Agency, UK,” the ED said.
The agency has also found that CKG sold Holiday Break Education Limited, UK (HBEL) a subsidiary of CKG 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.
In another suspicious transaction, Rs 150 Crores were diverted to Redkite Capital Private Limited, a company promoted by Anil Khandelwal, CFO of CKL and Naresh Jain (Internal Auditor of CKL) from Ezeego, another entity of CKG. “...This fund diverted to Redkite was used to buy a controlling stake in Tourism Finance Corporation Of India Ltd, a listed NBFC,” the ED added
Read More News on
(Catch all the Business News, Breaking News, Budget 2024 Events and Latest News Updates on The Economic Times.)
Subscribe to The Economic Times Prime and read the ET ePaper online.
Read More News on
(Catch all the Business News, Breaking News, Budget 2024 Events and Latest News Updates on The Economic Times.)
Subscribe to The Economic Times Prime and read the ET ePaper online.
Get Unlimited Access to The Economic Times
