Audit of Cox and Kings finds siphoning of funds, fraudulent sales: Report

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A forensic audit of Cox and Kings' accounts has found diversion of funds, fraudulent sales and window-dressing of records, according to a report by The Indian Express.

The audit of the travel company was conducted in February by PricewaterhouseCoopers (PWC), at the request of Yes Bank, which was one of Cox and Kings' largest borrowers.

The forensic audit stated that Cox and Kings had inflated its accounts between 2014 and 2019. It also found that some related party transactions had been made without loan agreements and prior approval from the board.

Moneycontrol could not independently verify the story.

Cox and Kings was sent to the National Company Law Tribunal (NCLT) in October 2019 after defaulting on crucial payments.

Transactions worth Rs 21,000 crore were made from 2015-2019 with the intention of diverting funds, The Indian Express reported.

It also said a Rs 1,100 crore loan was given to Alok Industries, a bankrupt company, though Cox and Kings had no business dealings with the entity.

The report said the loan was granted when Sunil Khandelwal, the brother of Cox and Kings chief financial officer (CFO) Anil Khandelwal, was the CFO of Alok Industries.

Sales worth Rs 9,000 crore were made to more than 160 non-existent customers, the report said.

In FY19, Cox and Kings granted loans Rs 589 crore to at least 11 related parties "without executing loan agreements", the report added.

"Prima facie it appears that these loans have been granted to related parties without obtaining the requisite approvals/documentation, which raises a suspicion that these transactions have been done with the intent of siphoning off funds," the investigation report said, as quoted by the publication.

Cox and King promoter Ajay Ajit Peter Kerkar was questioned in March by the Enforcement Directorate (ED) in relation to a money-laundering case against former Yes Bank chief Rana Kapoor.

Cox and Kings owes Rs 5,500 crore to lenders, and Yes Bank has an exposure of over Rs 2,267 crore, the report added.

Ajay Ajit Peter Kerkar, Anil Khandelwal and Cox & Kings have not yet responded to requests for comment by The Indian Express.