Chapter 12: Family that loots together, hides it together

Remember the names, Coad Investments and Castleman investments? Those were companies set up by PK under two different family trusts – Castleman is owned by The Castle Cove Trust and Coad Investments by The Welcome Trust. But there is one thing common to both these trusts – PK is the settlor of both these trusts and his wife is the ultimate beneficiary. Raima Inc – the Panama firm owned by the Kerkars was also part of these trusts. Interestingly, just before the IPO, Raima sold its 50 per cent stake in Cox and Kings to Kuber – a company owned and controlled by PK and made a $30 million profit from this deal. Now, ABM Good also made a cool $30 million from his sale of shares just before the IPO. In 2016, Kerkar’s Castleman Investments under his family trust in the BVI, borrowed $60 million from Deutsche Bank AG against a security given by Cox and Kings Asia Pacific Travel Ltd, in Hong Kong, a subsidiary of the listed firm Cox & Kings. Not surprisingly, Castleman defaulted on the loan repayment – which means the $60 million borrowed from Deutsche Bank AG was essentially stolen. In total, $120 million has been looted through these deals alone and the money just vanished into thin air. PK is now lying that his staff executed these fake transactions without his knowledge but therein lies the rub – Deutsche Bank AG uses voice authorisation for transactions which means the transaction must have been approved by PK himself. He has even filed cases to this effect alleging that his staff misused forged and fabricated documents to divert funds. While there is not an ounce of truth in any of those petitions filed by PK, such cases can derail and distract the investigation which has already proven to be too long. And that is his modus operandi – PK is the epitome of modern India’s fraudster billionaires who have built their empire on deceit and frauds. And when caught, their army of lawyers weave a tale of lies through courtcraft and false litigations to shield themselves from the retribution for their crimes. It is high time, the country’s investigation agencies make an example out of PK to show that these fraudsters cannot keep on gaming the country’s legal system.

Chapter 11: The heist of a lifetime

In his fictional work of the Aeneid, the ancient Roman poet Virgil describes how the Greeks treacherously defeated the city of Troy. The Greeks, who could not breach the fort of Troy after a 10-year long siege, pretended to sail away while secretly hiding themselves in a huge wooden horse that were placed at the doorstep of the empire.

The Trojans brought the wooden horse to their city within the fort as a trophy of their victory. As the night fell, the Greeks crept out of the wooden horse and opened the gates of the fort to the Greek army which then destroyed the great city of Troy.

The story bears close resemblance to what Senior Kerkar did to the Tata Group – one of the greatest business empires on earth. After joining the Tata Group’s Indian Hotels Company Limited (IHCL) as an assistant catering manager in 1962, Senior Kerkar rose up the ladders quickly to become its managing director in 1970, under the magnanimous JRD Tata – who allowed his managers full freedom to run the companies.

In the 70s, Kerkar was able to expand the IHCL in a major way to different regions even with little financial support from the Tata Group. By the 1980s, the poorly run IHCL had become a renowned and formidable hospitality brand under the chairmanship of Senior Kerkar who floated different companies under IHCL and struck numerous partnerships with foreign entities.

But Kerkar had his eyes set on elsewhere during the time. Back in 1970s, when Grindlays bank was asked by the British government to dilute its stake in Cox and Kings, the Kerkars cleverly brought enough shares to obtain a majority stake in it.

After that, Senior Kerkar utilised Tata funds to buy these shares from the Kerkar family at huge prices to rake in huge personal profits at the Tatas’ loss. Senior Kerkar didn’t stop there; he then forced the IHCL companies to sell back Cox and Kings shares to his family at meagre prices, causing lakhs of rupees in further loss to the Tatas.

Thus, between 1993 and 1996, the Kerkars consolidated their stake in Cox and Kings and replaced the Tatas as the majority stakeholder in Cox and Kings.

In 1996, Senior Kerkar forced Taj Trade and Travel (TTT), a Taj group company, to enter an agreement with Cox and Kings to give the latter access to TTT counters across the world – which simply means all the Taj hotels worldwide. The agreement was for 25 years with an option to renew it up to 75 years. Thus, he was able to build Cox and Kings at the cost of the Tatas’ business.

In his greed to build an empire on the foundations of lies and deceit, Senior Kerkar set up subsidiaries for Cox and Kings and several offshore companies in tax havens such as the Cayman Islands to siphon off the money from Tatas to these subsidiaries, such as the Cox & Kings Travel and Finance Ltd (CKTFL), that were all under the control of his family.


Kerkar also violated the Foreign Exchange Regulations in striking an agreement between IHCL and Singapore Airlines. The airline had an office in the Taj Mahal Hotel in Mumbai and was asked by Senior Kerkar to pay $4.91 million in security deposit to Taj Hotel’s Hong Kong subsidiary where his son’s associate – ABM Good – had a majority stake.

Instead of the Tatas receiving the money in India, Kerkar stole the money from Hong Kong and kept the whole affair secret and hidden from the authorities.
The heist didn’t stop there; Senior Kerkar also sold off IHCL’s special import licenses to PK’s associate at Cox and Kings at throwaway prices. He also diverted the profits of IHCL to Cox and Kings subsidiaries such as CKTFL.

However, by 1997, it all came to light that Senior Kerkar was expanding his own empire by leeching off IHCL. The Tatas found out that Senior Kerkar was diverting profits from IHCL to a network of suspicious foreign entities, including the Cox and Kings Group of companies which was directly under his family.

The Tatas soon found out the trojan horse inside the empire and was quick to throw him out. Ratan Tata, the incoming scion, made Senior Kerkar to resign and took over as the chairman of IHCL in a board meeting on September 2, 1997.

Although it marked the end of Senior Kerkar’s exploits at the Tata group of companies, it was a defining moment for the Kerkars who would then engage in deceitful ways of doing business for the next two decades

Chapter 10: The Maze of Malvern

Malvern was not only a shortlived enterprise but also a dubious one. In fact, it was liquidated within a week of Cox and Kings declaring bankrupt. Why would it be liquidated so soon if it was a genuine enterprise? The buck doesn’t stop there, the history and background of Malvern are shrouded in too much mystery and doubt. Here’s why – in less than six months after buying LateRooms, a hotel reservations platform, from the TUI group, Cox and Kings decides to sell it to Malvern – a company that was only 6 months old.

As someone who knows the Kerkars, it doesn’t strike to me as either a coincidence or a surprise that someone registered Malvern around the same time when Cox and Kings decided to buy LateRooms. But what’s more intriguing is that Cox and Kings bought LateRooms for £8.5 million and sold it to Malvern at £20 million in less than 6 months! Maybe PK can explain how the company’s valuation increased to more than twice its value within such a short time! 

It is also quite surprising that Adiuvat Investment Fund that owned 51% of Malvern agreed to the price label of £20 million – which is more than a two-fold increase within six months! However, Adiuvat Investment Fund, registered in the Cayman Islands, of all places, strangely had no representatives on Malvern’s board. 

Despite all these irregularities raising several alarms about the authenticity of Malvern, Yes Bank blindly lent INR 493 Cr to Malvern UK. PK stood personal guarantee for this loan even though the majority stake (51%) in Malvern is owned by Adiuvat, and it remains a mystery to this day as to why would Yes Bank allow PK to stand the personal guarantee when he is a minority stakeholder?

Also, considering that the information about Malvern’s parent firm, the Cayman Islands-based Adiuvat, is quite scarce (nobody knows who its partners are), it is surprising how Yes Bank did its KYC while lending the money to Malvern. And if they did do their KYC as they were mandated to, would Yes Bank know who is behind Malvern? Besides, the financial statement released by Malvern in March 2018 reveals that the company has been continually posting losses since its inception.

In its 2018 report, Malvern’s director states that the economic conditions pose ‘serious risk to the demand of their travel products’. So, why would Yes Bank still lend Malvern the money in November 2018 when the company itself declares loss and a risky future in March 2018? Did Yes Bank do its due diligence on Malvern?None of this is surprising now considering that Rana Kapoor, the erstwhile Chairman and co-founder of Yes Bank, is in jail today for money laundering.

Perhaps, the Enforcement Directorate’s finding answers all these questions. While investigating the Yes Bank scam, the ED found irregularities in the loans sanctioned to Cox and Kings group where it says that the group had “created multiple layers of onshore and offshore subsidiary across the globe” to siphon off the money. It also found that the documents submitted by Malvern for availing the loan were forged.

The ED also found out that the end-use certificates of its statuary auditor, BDO LLP, were also forged – as pointed out by KPMG, administrator of the UK-based entity.Malvern claimed that they were liquidated because of the financial impact of Covid-19.

But if that’s true, why would none of its parent companies, including Adiuvat which owned 51% of its stake, come to its rescue? Better yet, why would Yes Bank not bail it out considering that it once deemed Malvern worthy enough to lend INR 493 Cr of public money. 

Perhaps, the sole purpose of Malvern was to be a vessel for siphoning off the funds from Cox and Kings. Perhaps, Malvern was a sham that was brilliantly hidden in a maze of paperwork and bureaucracy that the Kerkars thought were too clever to uncover. But destiny would have the last laugh.

Chapter 9: The Domino effect

On 31st May 2019, Cox and Kings put out their annual results for the FY19. It revealed INR 620 Cr in cash, the total debt of INR 2000 Cr, and EBITDA of INR 274 Cr; and yet defaulted on the bank debt, cascading into bankruptcy.

Interestingly, PK had signed off on the FY19 annual results. What shocked the public more than the default despite the rosy picture painted by the annual results is the revelation made by Cox and Kings that they had a debt of over INR 5600 Cr – less than a year after PK declared that total debt in the company is only INR 2000 Cr.

Peter Kerkar and Urrshila Kerkar were signing off financial statements of the company for the past ten years and this time was no different – except that they were caught with hands still in the cookie jar.

The forensic report by PWC and the BDO brought to light the extent of fraud and plundering of Cox and Kings for the benefits of its promoters and losses to everyone else – employees, banks, shareholders, and investors.

The bankruptcy had grave consequences for the most vulnerable of the lot – the employees. Employees did not receive their paychecks and around 3,000 employees lost their livelihood.

Left in the streets to survive for themselves, some of them even took up odd jobs such as selling vegetables and such in the streets – all because the promoters went on to party with the funds with no concern for the company or the employees.

Several customers who had paid for their travel bookings were left stranded midway in their holidays as Cox and Kings did not honour its bookings. Some of the customers sued Cox and Kings and there have been cases related to this in the US and Kolkata.

PK thought that he always had one more rabbit to pull out of the hat. And why not – he had, in the past, coaxed, nudged, induced and even threatened people to get his way and he might have thought that this time was no different. However, no bidder came to acquire the brand or the business that is debt-ridden Cox and Kings; demise soon followed.

Cox and Kings lost its IATA license and had to put a sudden halt to its operations causing the loss of over 3000 jobs. Even the visa processing company did not get any suitors despite promises to employees that PK would get BLS or VFS.

Meanwhile, in the UK, things were unravelling fast – Malvern, an eclectic setup funded by Yes Bank, collapsed into liquidation within one month, leaving 350 employees jobless. PK was caught redhanded, but he had some malicious plans to slither his way out of it.

Chapter 8: As the masks fall off

PK’s net worth of shares in Cox and Kings and his residency in posh London created the image of a reputed and fast-growing businessman who benefitted from meeting the needs of the average, aspiring middle-class citizens of India who wanted to see the world.

While in reality, PK’s family trust was sucking the resources of Cox and Kings that were raised from banks in India, in other words, honest savings of the citizens of the country. On the exterior, Cox and Kings maintained a very high credit rating from domestic rating agencies as it was reporting good financials – little did people suspect – those financials were craftily manufactured by the company and devoid of reality.

There were rumours that PK and UK where indulging in insider trading using the family trusts and other overseas entities for keeping the price of the stock high to ensure that they can keep siphoning off more and more funds from the company.

While the HBR acquisition was lucrative, the loans taken for the acquisition needed to be serviced which required the company to take more loans till HBR’s assets could be sold. The market was already making the distinction – valuation gap between Thomas Cook and Cox and Kings widened as equity markets perhaps suspected something was not right in Cox and Kings financials.

To manage the loans taken at the promoter level which was backed by shares of Cox and Kings, PK started supporting the stock price. This required a clever structure to move money from Cox and Kings to service debt at the promoter level or to raise resources at the promoter level to buy shares of Cox and Kings.

A self-fulfilling outcome was the destiny – compounded by fraudulent revenue booking to show the health of Cox and Kings in a better light than what it was. The heydays were over and the empire was standing on a needle; PK had no room to maneuver. However, having done such aggressive management for so long, PK started contacting Qatar Airways to invest in Cox and Kings. The banks and institutions were approached for the loan, in particular Yes Bank.

The Yes Bank had an exposure of INR 3600 Cr in the group – INR 563 Cr in Cox India (UK was MD), INR 1150 Cr in PEL UK (whose only directors where ABM Good and PK), INR 440 Cr in CKFS (RBI regulated), INR 1000 Cr in Ezeego (promoter company) and INR 493 Cr in Malvern UK (51% owned by PE with no board representation, yet PK gave PG for this loan). It was not just Yes Bank – there were other large lenders – Axis Bank, SBI Cards, Laxmi Vilas Bank, Indus Ind, Kotak, etc.

All in all, the total claim filed against Cox and Kings in bankruptcy was over INR 5600 Cr, and that began haunting the Kerkars. Watch this space for more

Chapter 7: Hiding in the Havens

Money flew like honey – from lands as far away as Hong Kong and the British Virgin Islands. Castleman, a BVI company owned by PK, his wife and his daughters received a credit of ONR 450 Cr from Deutsche Bank on a security of INR 450 Cr bank balance of Cox and Kings Asia Pacific Travel Ltd – a 100 per cent subsidiary of Cox and Kings in Hong Kong.

This loan was not repaid by the Kerkars and the bank forfeited the deposit causing a loss of INR 450 Cr to Cox and Kings. While Indian Express reported this incident on October 18, no action was taken to bring PK to the books of justice. There were some notorious business dealings in Dubai that one got to hear from the office, notably around the loans from Yes Bank. What we do not know is how many such siphoning the promoters may have done.

As per reliable sources, the sum total of Cox and Kings money stolen by the Kerkars amounts to at least 2000 Cr, but one can be sure there is much in the loot by the Kerkars that is yet to be discovered as investigative agencies dig deeper into the scam at CnK.

PK set up family trusts for his wife and two daughters in the British Virgin Islands, namely Coad Investments and Castleman Investments. While he may claim ignorance about this, there is clear evidence that setting up this family trust was part of a well-hatched plan to hide money away from Cox and Kings and from the eyes of the taxman in India and the UK.

PK was simply following the footsteps of his father – Senior Kerkar, who had a for a long time been running a family trust in Guernsey, away from the eyes of Indian regulators. In fact, PK sought and received professional advice on which jurisdiction is better between the British Virgin Islands and Guernsey for opening a family trust to hide his loot.

The more and more the Kerkars portrayed Cox and Kings as a travel company that caters to the aspirations of the growing middle class of India, the more he was looting them by defaulting at the banks.

Chapter 6: The merry-go-round

PK’s ambitions to buy Holidaybreak were bankrolled by Axis Bank; thanks to his charming skills. This coupled with the large amount of capital raised by Cox and Kings would bring to the fore the lavish lifestyle splurge of the Kerkars. They splashed out the shareholder money on their favourite projects only to divert the funds for their personal expenses. Here are a few of them:

Tulip Hotels – Despite its failure to take off, Tulip Hotels was initially injected with equity of INR 18 Cr and was later given INR 160 Cr to fund the lifestyle ambitions of Senior Kerkar.

Ezeego – PK and his sister, Urshilla Kerkar (UK), started an online travel company – owned by the promoters and funded by Cox and Kings. The duo doled out favours to their friends by hiring them in the senior management of the online travel company. Despite being a loss-making entity, Ezeego’s employees, or rather its senior management, was paid handsomely. The fact that the company was used to swindle away Cox and Kings’ funds was known to all but none dared speak of it.

The Ultimate Travelling Camp (TUTC) – TUTC which offered luxury camping services in Ladakh had only losses to show for itself and was used to divert funds to the tune of INR 275 Cr.

Quoppro – Another loss-making company that was acquired by Cox and Kings. Quoppro was a visa processing company but never managed to achieve profitability.

Tempo Australia – Cox and Kings acquired Tempo – a travel agency in Australia and the lucrative job of running the company was given to PK’s brother in law, Patrick Tully. The business was kept alive for 10 years by diverting funds from Cox and Kings and plunged into bankruptcy soon after Cox and Kings defaulted in India.

Cox and Kings Financial Services (CKFS) – CKFS was rolled out of Cox and Kings in 2018 by obtaining separate NBFC license from the regulators. CKFS is in default to the tune of INR 400 Cr to Yes Bank.

There were more – Rosean Trading Company, Sunshine Awasan, Abeba Traders, Beckhem Trading, WAH Holidays, Newton Travels, Shoppe Till U Drop, etc – were all owned by affiliates or friends of the promoters that leached off the money that Cox and Kings borrowed from the banks. The splurge didn’t end there; jet setting, first-class lifestyle, parties, events – the whole nine yards. The greed took over to start plundering the company for the benefit of the Kerkars and to fund their luxury; while the money poured in from overseas through a network of suspicious entities.

Cox & Kings loaned out Rs 6,071 crore to at least 20 related parties sans board nod

Cox and Kings Dossier – Part 1: Audit uncovers siphoning of crores, fudging of records and bogus sales

Cox and Kings Dossier – Part 2: ‘Conspiracy, fraud’ – Loan diverted to firm run by top executives, including auditor

Cox and Kings Dossier – Part 3: Foreign subsidiaries fudged audit reports, bank records, probe says

Firm linked to Cox & Kings promoter under lens, got loan on security from travel co’s arm

Chapter 5: The Good, The Bad, and The Kerkars

The Cox and Kings story is incomplete without the story of ABM Good. The Kerkars and Good were very much hand in glove with each other in looting Cox and Kings. When the Grindlays Bank which owned Cox and Kings had to sell the business due to banking regulations in the UK, ABM Good, who was an employee of the bank, bought a 50 per cent stake in Cox and Kings. Later in the 1980s, he got into a partnership with the Kerkars when Senior Kerkar bought a 50 per cent stake in Cox and Kings by cheating Indian Hotels.

In 2006, Raima – the Panama entity – and Good brought 50 per cent stake each in Cox and Kings as a result of a swap of shares. Throughout its journey as a listed company, Good remained as the Executive Chairman of Cox and Kings, painting a rosy picture to shareholders and investors while turning a blind eye to the misdeeds of the Kekars. And he was paid handsomely by the Kerkars for playing ball in looting the banks and equity investors for over 15 years.

In 2007, Good again swapped his shares in Cox and Kings UK with Cox and Kings to gain additional shareholding in the latter.

Just before Cox and Kings’ IPO, in June 2005, Mr Good was allowed to buy 700,000 shares of the company at a price of a mere INR 50 per share. He then sold these shares at INR 597 per share to funds managed by Merrill Lynch, Goldman Sachs, and Deutsche Securities; making a handsome profit of INR 38.3 Cr. One may wonder why these big names did not invite FEMA’s attraction even as the Kerkars were on the other side of the transaction. Anyway, Mr Good made a huge profit and Cox and Kings’ shareholder register looked peachy with the addition of such big names, just before it went public.

Meanwhile, Cox and Kings shored up enormous resources through capital-raising methods; it raised INR 500 Cr through the IPO in 2009, INR 300 Cr through a GDR in 2010 and INR 1000 Cr through a QIP in 2014. With a hefty purse to let loose, PK hatched his next big move – to buy Holidaybreak (HBR), an education, activity and leisure travel group based in the UK, with a presence all over the UK and Europe. However, there was one major roadblock to PK’s plan – Holidaybreak was a much bigger company than Cox and Kings and PK needed more capital to buy it. With Senior Kerkar’s rap still afresh in the country’s memory, no public sector bank was willing to finance PK’s adventure, but he had other plans.

Mr Good’s exploits, too, don’t end there; nearly a decade after, he received another payout. This time, he sold 3.4 million shares that belonged to him at INR 230 per share and made a cool $13 million at the prevailing exchange rate. Thus, Mr Good made a profit of over $22 million by acting as a rubber stamp chairman of Cox and Kings, and by turning a blind eye and a deaf ear to the frauds committed by the Kerkars. But nobody knows where the money went and neither is anybody asking what happened to the money nor who benefitted from all these suspicious transactions. Following just the money trail would be enough to bring out the scope of the fraud committed by the Kerkars and Good. As you read this blog, PK is sitting in his jail cell plotting his way out of the mess he created while his lawyers are running amok to save him. And the investigators are turning the sky upside down to crack the mystery behind numerous circuitous transactions. Meanwhile, the enigmatic Mr.Good continues to roam free in the shadows.

Chapter 4: Crime pays the Kubers

The IPO of Cox and Kings made the Kerkars handsomely rich, albeit through crafty corporate manoeuvres. Remember Raima Inc, the Panama firm controlled by the Kerkars? It acquired 11 per cent stake in Cox and Kings through a stock swap (a stock swap is where two companies sell their stakes to one another).

Raima Inc then went on to sell its stake in Cox and Kings to a Mauritius-based company owned by Peter Kerkar named ‘Kuber’. In this sale, Raima Inc made a $30 million profit by selling shares. This way, the Kerkars managed to sweep in millions through a network of front companies in offshore tax havens, all the while keeping Raima Inc safely under the radar. Decades after, today, we don’t know where the money went.

Law enforcement agencies are yet to uncover the trail of the money but they know that it made a lot of people rich; and the rich, even richer. Among them was ABM Good, a man who served on the boards of multiple companies with Peter Kerkar, and a close confidante of the Kerkars for more than 40 years. Good got into partnership with the Kerkars during the 1980s when he was an employee of the Grindlays bank in India.

He was a shareholder of Cox and Kings in the 80s and a 50% shareholder of Cox and Kings UK – from the initial days when Grindlays sold the business to Good and Indian Hotels (which was then under the chairmanship of Senior Kerkar). In 2007, Good swapped his shares in Cox and Kings UK with Cox and Kings to gain additional shareholding in the latter.

Throughout its journey as a listed company, Good also remained as the Executive Chairman of Cox and Kings, painting a rosy picture to shareholders and investors while turning a blind eye to the misdeeds of the Kekars. How Good and the Kerkars took their partners, the taxpayer, and state-owned Indian banks for a ride is a story for another day.

More tomorrow.

Chapter 3: A web of deceit

Raima Inc. is a very interesting entity. It was registered in Panama, owned by a trust in Guernsey – an English island near the French Coast – but controlled by the Kerkar family.

An offshore leaks website even says that Raima Inc was associated with Mossack Fonseca. Even during a time when there were strict foreign exchange restrictions, Senior Kerkar managed to have a family trust in the UK and hid his assets in plain sight from the government – something that he often boasted to his employees.

We also heard a lot from him about the history of Cox and Kings, and almost always you could sense that the man was quite pride of the strides the company had made. And it was true to some extent; if not for Senior Kerkar’s crafty deeds, or rather misdeeds, Cox and Kings wouldn’t be the brand that we recognize. The lucrative contracts that he secured for Cox and Kings to manage the travel desks at Taj for long periods of time without any competitive bid landed the travel company with high-heeled customers, foreigners and Indians alike, filling up its coffers and giving it a reputation.

The honeymoon ended when Ratan Tata ousted Senior Kerkar from the board; Indian Hotels promptly closed the Cox and Kings contract as Kerkar left the door. Meanwhile, Peter Kerkar played the role of the prince in waiting well; he graduated from Stanford, developed the tact and taste of a hotelier, wined and dined with bankers and the likes, and so on. It was good times for Cox and Kings and the company expanded to Japan.

With consolidation and part monetization in mind, Cox and Kings planned to make a big move – an IPO in India with the Indian company as the holding company – a plan that would soon turn out to be an element of the Kerkars’ web of deceit.

More tomorrow.