The Cox and Kings Group has been accused, via its foreign subsidiaries, of forging reports of global audit firms and statements of banks, reports The Indian Express.
These documents were allegedly used for better credit facilities from lenders and to manipulate the financial statements of Cox and Kings Ltd. This is shown in records of the resolution professional appointed by the National Company Law Tribunal (NCLT) and an internal probe conducted by Yes Bank Ltd. after the exit of Rana Kapoor, co-founder of the bank, say the Express report.
Cox and Kings was one of Yes Bank's top borrowers when Kapoor was still with the bank. The bank had an exposure of Rs 2,267 crores to the company.
The report further stated that in 2018, Malvern Travel Ltd. UK, where Cox and Kings held 49 percent stake, submitted forged end-use certificates and a bank account statement of its statutory auditor BDO LLP, and bank, Royal Bank of Scotland (RBS), respectively with Yes Bank, in order to get a loan of 47 million pounds from the bank.
After Malvern and its three subsidiaries declared bankruptcy in in July 2019, consultancy firm KPMG was signed on as the administrator of these firms. In January 2020, after a fresh audit, KPMG shared the original bank statements of these firms with Yes Bank.
Based on these statements, Yes Bank alleged diversion of loan funds by Malvern to other Cox & Kings Group entities “leading to a complete destruction of enterprise value of Malvern”, said the Express report.
“As a former auditor of Malvern Travel, we are bound by commercial confidentiality and so can’t comment on any allegations made about the former management,” an official spokesperson of the BDO told the paper.
The paper reports that records show that an UK audit firm, had filed a criminal complaint before the National Crime Agency in the UK against Prometheon Enterprise Ltd (UK), a subsidiary of Cox and Kings Group for forging the statement of accounts of Prometheon for year 2019.
The audit company, Raffingers, said it has not signed any statement of accounts of Prometheon for FY 2019, as it was unable to complete its audit.
Records of the resolution professional, on the other hand, states that the forged statement of accounts of Prometheon was allegedly sent to the statutory auditors of Cox & Kings in India, for consolidation, from a “fictitious domain name and email id of Raffingers”.
In March, the resolution professional told the Ministry of Corporate Affairs (MCA) that due to the alleged forgery by Prometheon, the consolidated accounts of Cox and Kings Ltd,. signed by its chief financial officer and company secretary, are incorrect. The RP has also reported it as a fraud. Yes Bank has an exposure of 157 million pounds (about Rs 1460 crore) to Prometheon, that has defaulted in its payment obligation since June 2019.
(With inputs from The Indian Express)
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