Govt Probe Into Acquisition Of Cox & Kings

The Union government is inquiring into the acquisition of the Rs 110-crore travels and tours company, Cox & Kings (India) Limited, by Anthony Good, a British national and a close associate of Ajit Kerkar, former chairman and managing director of Indian Hotels Limited (IHL).

The government inquiry is based on its information that Goods acquisition of Cox & Kings (India) was made possible by extensive money laundering operations organised by Mr Ajit Kerkar. In the last week of July, director-general and joint secretary of the Economic Intelligence Bureau (EIB), Siddharth Kak, had written a letter to first secretary (Trade) in the Indian High Commission in London, S P Singh, seeking his assistance in the probe.

 

A copy of Kaks letter is in possession of Business Standard. Kerkar was not available for comment.

The information available with the government also states that Cox & Kings (India) is actually controlled by Kerkars son, Peter, who is the chief executive of the company. Good merely acted as a conduit for the funds to enable takeover of Cox & Kings. Other-wise, Good is said to be a man of limited means, Kaks letter stated.

Good has a 50 per cent stake in Cox & Kings (UK), which in turn has a 40 per cent stake in Cox & Kings (India). The government inquiry is to find out how Good acquired the 40 per cent stake in Cox & Kings (India) through his company, Cox & Kings (UK). Significantly, Peter Kerkar is a 50 per cent beneficiary of the 40 per cent stake held by Cox & Kings (UK) in Cox & Kings (India).

According to information available with the EIB, the funds provided to Good to acquire the stake in Cox & Kings (India) were made available by siphoning off profits from overseas hotel operations of IHL in the United States, other countries and from the sale of Baileys Hotel in London.

Kaks letter to the Indian High Commission official requested that all antecedents of Good, particularly his financial background, may be checked out and the EIB informed of the details. With a view to imparting urgency to the probe, Kaks letter mentions that the finance minister is also apprised of the information available with the Bureau. The FM has desired that the Bureau conduct the verification quickly,, the letter adds.

The changing shareholding pattern of Cox & Kings (India) was a major cause of tension between Ajit Kerkar and the Tatas. Between 1992 and March 1996, the Kerkar family increased its stake in Cox & Kings from 17 per cent to over 30 per cent. Thus, what was seen as a Taj group company became a company controlled by Kerkar and his family.

Good has been a close associate of the Kerkar family. He is also associated with Good Relations India Ltd, a public relations firm wholly owned and promoted by Cox & Kings.

Questions are also being raised about the manner in which an overseas fund floated by Cox & Kings failed to make proper disclosures. It had claimed that the company is setting up a bank, for which Cox & Kings Travel and Finance Limited had received the required approvals from the RBI. But in fact only a letter of intent from the RBI had been issued, which too was cancelled.

The fund was launched in November 1995, in association with J Henry Schroeder Bank A G of Zurich.. Known as The India 21st Century Fund, it was listed on the Luxembourg stock exchange for investing in Indian companies. Kerkar was on the board of the fund. The fund was open for subscription from November 10, 1995 to December 12, 1995. About $15 million were collected for the fund.