MUMBAI, Nov 27: The Enforcement Directorate has arrested Peter Kerkar, the promoter of bankrupt travel company Cox & Kings, under various sections of the Prevention of Money Laundering Act. Peter Kerkar was arrested in Mumbai on Thursday and would be produced before a court on Friday.

The company faced bankruptcy proceedings in October 2019 after it defaulted on repayments of bank loans. Corporate insolvency resolution process is going on. It owes Rs 5,500 crore to various banks. It had borrowed heavily from YES Bank.

Ex-chief financial officer Anil Khandelwal and internal auditor Naresh Jain were arrested last month.

The ED said, AnilKhandelwal and Naresh Jain had "purchased various immovable properties from the funds diverted from Cox & Kings Group (CKG)."

"CKG forged its consolidated financials by manipulating the balance sheets of overseas subsidiaries. In addition, some board resolutions submitted to banks for sanctioning the loans were also found to be forged," the ED had claimed.

The CBI has also filed an FIR against Ezeego One Travel & Tours Limited, a sister company of Cox & Kings, for non- payment of loans worth Rs 900 cr to YES Bank. The FIR says that the company was involved in the diversion of funds to Cox & Kings. The SBI has also filed a complaint against Cox & Kings.

Earlier, the ED had found in investigations that Cox & Kings used fictitious customers to launder borrowed money.

The Enforcement Directorate had six months ago conducted searches of the premises of Ajay Ajit Peter, Pesi Patel, Abhishek Goenka, Anil Khandelwal and Naresh Jain of Cox & Kings Group in Mumbai.