The National Company Law Tribunal (NCLT) has admitted the financial unit of debt-laden travel firm Cox & Kings to insolvency for a default of Rs 445.5 crore on a plea by private sector lender Yes Bank.
Pardeep Kumar Sethi, appointed as interim resolution professional, will take control of Cox & Kings Financial Services Ltd (CKFSL).
Yes Bank had approached the court after CKFSL defaulted on a working capital loan and a credit facility sanctioned in October 2018 and March 2019, respectively.
CKFSL, primarily in the business of foreign exchange, was demerged from parent Cox & Kings Ltd in 2018, also facing insolvency.
The firm became a non-performing asset (NPA) in October 2019.
Two months later, Yes Bank sent an ‘invocation of personal guarantee’ notice to promoters Ajay (Ajit Peter) Kerkar and his wife Urmila Kerkar.
Promoters including Ajay Kerkar and Kubber Investments (Mauritius) Pvt Ltd, which government agencies suspect is controlled by him, own 12.20% of CKFSL. Government-owned Life Insurance Corporation of India owned 2.04% of the company as on March-end 2021.
In January this year, chief financial officer Milind Ramesh Gandhi resigned citing personal reasons.
CKFSL got listed in April 2018. The company was also registered as an NBFC but the licence was voluntarily surrendered in September 2019.
Cox & Kings
This is the second listed firm promoted by Ajay Kerkar to be admitted into proceedings under the Insolvency and Bankruptcy Code (IBC).
Mumbai-based Cox & Kings Ltd has been undergoing bankruptcy proceedings since November 2020 after the NCLT admitted a plea in October 2019 filed by Rattan India Finance.
In March this year, the group company disclosed that its lenders have filed an application for liquidation.
Lenders such as State Bank of India (SBI), IndusInd Bank and Indian Bank have declared the account as ‘fraud’.
The Economic Offences Wing (EOW) is investigating five FIRs against Cox & Kings group for alleged frauds involving over Rs 1,950 crore. In December 2020, it registered its sixth FIR against Cox & Kings, promoter, directors and other employees for allegedly duping private sector lender Laxmi Vilas Bank of Rs 35 crore.
As on May 6, 2021, the admitted claims against the company stood at about Rs 5,838 crore, the firm’s website showed.