PMLA court sends Cox and Kings Group promoter to ED custody till December 3 in money laundering case

The role of Kerkar and his company emerged when the central agency was probing the alleged financial irregularities and money laundering linked to the Yes Bank fraud case

The special court set up to try cases under the Prevention of Money Laundering Act (PMLA) has remanded Ajay Ajit Peter Kerkar, the promoter of global tours and travel company Cox and Kings Group (CKG), to the Enforcement Directorate (ED) custody till December 3 on Friday, a day after he was arrested.

Cox & Kings promoter Ajay Kerkar being taken to PMLA court on Friday. (Anshuman Poyrekar/HT Photo)

The role of Kerkar and his company emerged when the central agency was probing the alleged financial irregularities and money laundering linked to the Yes Bank fraud case. The ED, which arrested Yes Bank’s founder Rana Kapoor in March, has been scanning the transactions made by the bank to its borrowers.

Kerkar has previously denied all the allegations against him.

According to ED, its preliminary investigations had revealed that Cox and Kings Group had defaulted Rs3,642-crore loans taken from Yes Bank. The loans sanctioned from Yes Bank were driven by Kapoor after bypassing the norms, the ED had alleged.

In June, ED officers had raided five premises belonging to the senior management of the Cox and Kings Group, and last month, the agency had arrested the travel company’s chief financial officer Anil Khandelwal and internal auditor Naresh Jain.

While seeking Kerkar’s custody, public prosecutor Sunil Gonsalves argued that the loans given by Yes Bank to the Cox and Kings Group were diverted by Khandelwal and Jain in connivance with Kerkar.

“Funds were diverted to a firm named Ezeego, which is another entity of the Cox and Kings Group. The depositors’ money, which went to Ezeego through Cox and Kings, and from there to the group’s other entities Redkite and Promytheone, were further diverted to various overseas accounts. The balance sheets were manipulated to avail more loans from two more banks,” argued Gonsalves. He had contended that ED had to ascertain for whom the funds were diverted, as the Cox and Kings Group had 30 subsidiary companies and for this, it needed Kerkar’s custody.

The defence advocate has opposed ED’s request on the grounds that a case has been registered by Kerkar against Khandelwal and Jain at Nagpada police station on the charges of money laundering. The advocate argued that the custody of the accused with the ED was not essential as Kerkar has been falsely arraigned in the case.

However, the ED said that Kerkar had lodged complaints against Khandelwal, Jain and others with an ulterior motive to camouflage his role in the case. Investigations have pointed out that Kerkar was the mastermind behind siphoning off the proceeds of crime and hence an additional Enforcement Case Information Report (ECIR) was registered on November 23 against him.

After hearing both the sides, the court felt that the alleged irregularities need to be investigated for which Kerkar’s custodial interrogation is needed and remanded him in ED’s custody for six days.

Meanwhile, in a related development, the economic offences wing (EOW) of the Mumbai Police registered the fifth first information report (FIR) against Cox and Kings Group for allegedly cheating HDFC Bank of Rs50.71 crore. The banking (fraud) unit-2 of EOW booked Kerkar, along with Urrshila Kerkar (who is also a promoter of the travel firm), directors, auditors and others executives of Cox and Kings Group on the complaint of Rajit Matloob Quereshi, an authorised representative of HDFC Bank.