Anil Khandelwal Chief Financial Officer Cox and Kings Arrested

Anil Khandelwal Chief Financial Officer Cox and Kings Arrested

The Enforcement Directorate (ED) has arrested Cox and Kings' Chief Financial Officer Anil Khandelwal and internal auditor Naresh Jain in the alleged money laundering case involving YES Bank's former Promoter Rana Kapoor.

ED said that both the accused were produced before the Hon'ble Special Judge (Prevention of Money Laundering Act, 2002) and they were granted 7 days ED custody.

Kapoor is being investigated by the ED for allegedly taking kickbacks for disbursing high-value loans. According to the first chargesheet filed in May, ED stated that the bank had created a credit watch list that included Cox and Kings, Dewan Housing Finance Ltd (DHFL), Reliance Group, Essel Group and Radius Developers, in March 2019.

Cox and Kings is the second high-value borrower from YES Bank which is being investigated, after DHFL promoters Kapil and Dheeraj Wadhawan were arrested by the Central Bureau of Investigation (CBI) in April.

Cox and Kings Group of Companies (CKG) defaulted on Rs. 3,642 crore to YES Bank. "Investigation revealed that CKG forged its consolidated financials by manipulating the balance sheets of overseas subsidiaries. In addition, some board resolutions submitted to banks for sanctioning the loans were also found to be forged," ED said.

YES Bank sanctioned the loan at the behest of the then Chairman Rana Kapoor bypassing the norms. ED also added that Kapoor had given clear instruction to the concerned bank officials to sanction the loan and not to make efforts to recover it.

According to the probe agency, during FY15-20, the Cox and Kings sold products worth Rs. 3,908 crore to 15 non-existent or fictitious customers, but a majority of the collections shown in the ledgers are from Ezeego (another CKG group entity) which were not found in its bank statements.

According to ED, the UK-based group diverted Rs. 1,100 crore to another stressed company without any approval of its board which has no business relationship with the company.

Cox and Kings' total dues to financial creditors stand at Rs. 5,900 crore. Many banks have provisioned 15-25% till December 2019 for the account. YES Bank has the largest exposure, followed by Axis Bank (Rs. 1,065 crore), State Bank of India (Rs. 635 crore) and IndusInd Bank (Rs. 270 crore). Cox and Kings is undergoing resolution at the National Company Law Tribunal (NCLT) since October 2019.