The Mumbai Police's Economic Offences Wing (EOW) has arrested a key associate of Ajay Peter Kerkar, the owner of the international tour and travel firm Cox & Kings, in connection with a Rs 400-crore fraud case involving Yes Bank.

On April 9, at the Cochin International Airport in Kerala, authorities caught Ajit P Menon, a British national, who had been wanted in the case for three years. He had just arrived from the United Kingdom. The Economic Offences Wing (EOW) issued a Look Out Circular (LoC) against him, so they brought him to Mumbai for more investigation.

In February 2021, the EOW filed a case against Cox & Kings Financial Services Ltd (CKFSL), a subsidiary of Cox & Kings, for allegedly defrauding Yes Bank of approximately Rs 400 crore. The EOW registered the FIR based on a complaint lodged by Ashish Vinod Joshi, the chief vigilance officer of Yes Bank, naming Ajay Peter Kerkar, his wife Urshila Kerkar, and others as suspects.

An EOW source revealed that Menon was appointed as managing director of the company by Kerkar's instructions, although this appointment was not documented in the records. Cox & Kings Financial Services Ltd was engaged in providing various non-banking financial services, including foreign exchange business, holiday financing, and student loan financing.

The FIR alleges that the accused misrepresented the financial condition of the company as healthy by falsifying purchase and sale transaction records in its account books between 2018 and 2019.

"The accused allegedly secured a loan of Rs 400 crore from Yes Bank between September 7, 2018, and November 1, 2019," stated Joshi, the complainant, in the FIR. "A significant portion of the loan funds was purportedly diverted to Cox & Kings Ltd for its own advantage."

The complainant added, "The accused company allegedly submitted inaccurate or falsified financial statements to portray a higher creditworthiness. They purportedly did not utilise the loan funds for their intended purpose and violated several terms and conditions set by Yes Bank. By allegedly manipulating balance sheets, they breached the bank's trust and caused an estimated wrongful loss of Rs 398.38 crore to the bank.”

"The company allegedly submitted false financial statements to show higher creditworthiness, misused loan funds, and violated Yes Bank's terms, causing an estimated loss of Rs 398.38 crore," the complainant stated.

During the investigation, EOW officials discovered that Rs 396 crore of the loan funds were illicitly redirected to Cox & Kings Limited as per Menon's instructions.

The EOW also obtained statements from key senior executives of the company, including Milind Gandhi, Ravi Menon, and Shailesh Pednekar, recorded under CrPC section 164 before the court. They affirmed that Menon was responsible for managing all loan transactions and company policies.

On September 14, 2018, Rs 56.62 crore was diverted to a UK company where Menon served as CEO, suspect EOW officials. Menon faces charges including cheating and forgery. Kerkar and other officials are in custody over bank fraud cases.

Image source: Indian Express