Rs 400-crore Yes Bank fraud: Cox & Kings owner’s aide held from Kerala

In February 2021, the EOW registered an offence against Cox & Kings Financial Services Ltd (CKFSL), a sister concern of Cox & Kings, for defrauding Yes Bank of nearly Rs 400 crore. The EOW FIR had named Kerkar, his wife Urshila Kerkar and others on the complaint of Ashish Vinod Joshi, chief vigilance officer, Yes Bank.

Menon was named managing director of the said company on the instructions of Kerkar but his appointment was not on the records, said an EOW source.

Cox & Kings Financial Services Ltd was into providing foreign exchange business, holiday financing, student loan financing, and other non-banking financial services.

According to the FIR, by making false and bogus purchases and selling transaction records in the company’s account books during 2018- 2019, the accused showed the financial condition of the company is in good shape.

“By way of this, the accused managed to avail a loan of Rs 400 crore from Yes Bank from September 7, 2018 to November 1, 2019. A major portion of the loan money was allegedly diverted to Cox & Kings Ltd for its own benefit,” said Joshi, the complainant, in the FIR.

“The (accused) company presented its incorrect/falsified financial statements to justify high creditworthiness. The company did not use the loan money for the purpose they have availed it. The company also violated various terms and conditions imposed by Yes Bank and breached the bank’s trust with the help of fudged balance sheets and caused wrongful loss to the bank to the tune of Rs 398.38 crore,” the complainant added.

During the investigation, EOW officials found that of the loan money, Rs 396 crore was fraudulently diverted to the Cox & Kings Limited on Menon’s instructions.

The EOW also got the statements of company’s key senior executives Milind Gandhi, Ravi Menon and Shailesh Pednekar recorded under CrPC section 164 before the court. They, too, stated that Menon was handling all the transactions of loan amount and company policy.

On September 14, 2018, Rs 56.62 crore was diverted to the State Bank of India account of Promethon Enterprises Ltd., United Kingdom, a foreign company. Menon was looking after the operations of the UK company as the CEO. Hence it has been established that he is also the beneficiary, EOW officials suspect.

Menon was looking after the operations of the group companies of the Cox & Kings group in Europe. The company allegedly diverted bank loan money to its foreign companies. By interrogating Menon, EOW now wants to investigate how this money was utilised by the accused persons.

Menon has been arrested under Indian Penal Code sections 420 (cheating), 406 (criminal breach of trust), 465 (forgery), 467 (forgery of valuable security), 468 (forgery for purpose of cheating), 471 (using as genuine a forged document or electronic record) and 120B (criminal conspiracy).

Kerkar along with company’s senior functionaries are facing multiple bank fraud cases. They were arrested and chargesheeted by EOW and Enforcement Directorate (ED) ovre the past few years and are in judicial custody.