Page 11 - Banking Finance November 2019

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Govt to bring NBFCs un- Kolkata Police probes in Cox & Kings’ Rs 40 crore fraud
der insolvency code case

Within the ambit of the Insolvency An investigation has been conducted by Kolkata Police, against tour operators
and Bankruptcy Code, the govern- Cox & Kings (India) in a cheating and misap-
ment is set to bring non-banking fi- propriation case for allegedly collecting an
nance companies, but in a slightly amount of Rs 40 crore from around 75
tweaked form, for smoother resolu- people "on the pretext of conducting over-
tion of these entities and firewall the seas tours".
rest of the financial system from any
possible adverse impact. According to a top officer, the tour operator
failed to fulfil the commitment and did not
The move comes in the pretext
when several NBFCs are under stress return the booking amount. In accordance with the reports, the company has
and is based on the government’s ex- allegedly shut down its 6, Russel Street office and given notice of its inability to
perience with IL&FS, where it had to conduct overseas tours.
step in and appoint a new board af- The report also underscores that the company has asked 2,000 employees in
ter superseding its directors.
order to resign pleading helplessness in paying their due salaries for three months.
Resolution has been slow for a year Based on the complaints lodged by Camelia Dutta and others, a case has been
and the government has been forced registered against the directors and promoters of the company Cox & Kings (In-
to step in to ensure smooth resolu- dia) Limited, said Joint Commissioner (crime) of Kolkata Police Murlidhar Sharma
tion of assets to ensure that banks said.
and finance companies that have an
exposure to IL&FS group are not The officer said that under sections of the Indian Penal Code for criminal breach
impacted by the crisis. of trust, cheating and criminal conspiracy, the complaint against the company
But unlike other companies, where was registered at the Shakespeare Sarani police station.
a resolution professional is appointed The complainants had alleged "cheating and misappropriation of booking
by the National Company Law Tribu- amount" to the tune of Rs 7.50 crore "on the pretext of conducting tour in dif-
nal, the ministry of corporate affairs ferent foreign countries", Sharma said.
and the department of economic
affairs in the finance ministry are "Enquiry reveals that the company has collected huge the amount of Rs 40 crore
working out an arrangement that from approximately 75 complainants for conducting tours in different countries
draws from the Financial Resolution on the basis of their reputation but neither fulfilled the commitment nor re-
and Deposit Insurance Bill, which turned the booking money," he said. The detective department of the city po-
was withdrawn. lice is conducting the probe, he said.

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