The Ministry of Corporate Affairs (MCA) has ordered a Serious Fraud Investigation Office probe in travel firm Cox & Kings after it uncovered prima facie evidence of siphoning of money, a source told Moneycontrol.
The MCA's Western Regional Director submitted the findings of its inspection into Cox & Kings to the ministry in October.
The inspection was triggered after Cox & Kings defaulted on its commercial paper obligations.
The first instance of default on commercial papers (CPs) worth Rs 150 crore was declared by the company on June 27, 2019, a day after the date of actual default. The second instance was made public on default on CPs worth Rs 50 crore on June 29, while the actual default happened on June 28, 2019, according to PTI.
On July 1, Cox & Kings said that the company's working capital situation was stretched in the last few months, which was further impacted due to its inability to replace short term loans with long term loans or regular working capital lines.
The default look puzzling in the context of Cox & Kings' official financial position: in 2018, it had cash balance of Rs 1,830 crore and trade receivables of Rs 2,418 crore.
In October, the International Air Transport Association (IATA) terminated Cox & Kings' licence to sell air tickets and asked the company to surrender its IATA ID card.
Cox & Kings had a total debt of Rs 3,238 crore at end of FY19, including short- and long-term loans.
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