Mumbai Police’s EOW registers 2 FIRs against Cox & Kings for “duping” Axis Bank, firm of ₹1,582 crore

The economic offences wing (EOW) of the Mumbai Police has registered two fresh first information reports (FIRs) against global tours and travel company Cox & Kings (CNK) as well as its group company Ezeego One Travels for allegedly duping Axis Bank and a private investment company of Rs1,582 crore.

CNK has been booked for payment default, cheating, forgery, criminal breach of trust, falsification of documents and criminal conspiracy, among other charges, said EOW officers.

An EOW officer privy to the probe said that the new cases were first registered at Cuffe Parade and MRA Marg police stations on Friday and was later transferred to EOW.

On behalf of Axis Bank, its vice-president Prakash Prabhakara Rao filed a complaint against CNK at Cuffe Parade police station.

Nine people – Ajay Peter Kerkar (CEO and group director of CNK); Urrshila Kerkar, Pessey Patel, ABM Good, Anil Khandelwal, Mahalinga Narayanan, Arup Sen, Manisha Amblapurkar and Nilu Singh – have been made accused in this case.

“Axis Bank in their complaint has told the police that CNK had taken several loans from them under the company’s name and diverted the funds to suspicious bank accounts. Because of such misappropriation of funds, CNK and Ezeego jointly owe Axis Bank a total of Rs1,030 crore. They caused wrongful losses to the bank,” an officer who is part of the probe said.

Meanwhile, Kerkar has refuted all the allegations against him and termed them baseless and frivolous. He said he has lodged a counter FIR against Axis Bank. “The allegations made in our FIR are being probed by the EOW. In the FIR, we have clearly revealed the modus operandi of Axis Bank. We have provided definite proof of collusion of Axis Bank officials to divert money from Cox and Kings and Ezeego to other companies,” said Kerkar, adding, “It is clear that this is simply a counterblast to divert the attention from their obvious crime and mislead the media.”

In the second FIR at MRA Marg police station, Kerkar, Urrshila, Ezeego company and other individuals were booked after Dinesh Goel, director of Investment Opportunities IV Pte Ltd – an investment company incorporated under the laws of Singapore and its investment advisor SSG Capital Management (Singapore) Pte Ltd – approached the police alleging misappropriation of funds. Documents pertaining to the probe in possession with HT indicate that in October 2018 Goel was approached by Kerkar with a request for loans for CNK’s offshore subsidiaries, Prometheon Enterprises Limited (PEL) and its offshore subsidiary Prometheon Holdings UK Limited (PHUK). The loan was reportedly sought to repay the loans of CNK in India, as the travel company did not have any borrowing capacity.

Axis Bank has refused to comment on the matter.

On October 15, 2018, Kerkar, in a meeting with Goel at Fort, reportedly told the latter that only Rs1,850 crore was outstanding for CNK to avail the loan from the complainant company. This had been subsequently admitted by Kerkar in his documents filed in the United Kingdom under oath and is also evident from the multiple financial disclosures of CNK received by the complainant company as part of its financial monitoring.

“Kerkar made several representations and false assurances to the complainant and its key persons that he has to repay the said loans in India with foreign-fund loans,” Goel’s complaint stated.

Based on the representations and information provided by Kerkar, the complainant made available a short-term loan of 33 million pounds in December 2018 to PEL. This facility was used to transfer amounts to CNK in India for the repayment of its loans in India. Goel has alleged that Kerkar had again misled his company and used the loan amount to avail another loan, worth 50 million Euros for PHUK, under a facilities agreement on March 20, 2019, which was used by CNK to refinance the loan due from PEL.

In April 2019, Kerkar again approached Goel seeking another loan. The complainant then provided a loan of $10 million in April 2019 to PHUK under a facilities agreement on April 25, 2019, against a corporate guarantee from CNK of $70 million and a personal guarantee from Kerkar, the police said.

Before October 2018, Kerkar, Urrshila and some other unidentified accused, allegedly hatched a criminal conspiracy, and in furtherance of their common intention and mala fide and to deceive and defraud the complainant, co-ordinated and made numerous false representations to Goel to provide loans to CNK Group entities on the basis of a false debt position at CNK, said the police.

The intention of the accused persons was dishonest, fraudulent and mala fide at the outset itself and they never had the intention to pay back the said loan amounts. Their acts caused wrongful losses, prima facie worth Rs552 crore to the investment company, the complainant alleged in the FIR.

To the allegations made by the investment firm, Kerkar said, “This is an entity controlled by SSG. I have accused them of colluding with the key management personnel of Cox and Kings to transfer our assets to themselves illegally. A further point is that all the foreign companies mentioned in the FIR are companies which the Investment Opportunities Fund IV/SSG are a partner and had board representations. He also claimed that it is the investment company which caused losses and he is the victim in the case.

This is the fourth FIR against CNK filed by the EOW. Earlier, the agency had booked Kerkar, along with the other directors and senior executives of CNK on complaints filed by Kotak Mahindra Bank and IndusInd Bank for allegedly duping them of Rs170 crore and Rs284 crore, respectively. The banking fraud unit-2 of EOW is investigating all the four FIRs against CNK.

Earlier, Kerkar had refuted to the allegations made by Kotak Mahindra Bank and IndusInd Bank too, and had termed them baseless.