The hotel chain’s boss was recently detained for several days for police questioning. The incident could be related to a larger fraud case.
Ajit Menon, the CEO of the German hotel chain Meininger Hotels, was reportedly arrested at the airport on April 9 after a flight from London to Kochi in the southern Indian state of Kerala. This was reported by various Indian media such as the “Hindustan Times”.
The Mumbai Police’s Economic Offenses Wing (EOW) arrested Menon in connection with a case of suspected bank fraud. The focus is on the travel company Cox & Kings Financial Services. Menon was said to be a close associate of Cox & Kings owner Ajay Ajit Peter Kerkar, who is already in custody.
Menon’s interrogation took place on the basis of a so-called Look Out Circular (LOC), a type of wanted letter with which Indian authorities monitor and prevent the entry and exit of people wanted by the police.
An official said Menon was produced before a court in Mumbai, which remanded him in police custody until April 15. In Germany, specialist media such as the comparison portal first reported on the incident.
Berlin hotel chain confirms questioning of its CEO
As CEO of Meininger, Briton Menon is responsible for 38 hotels in several European countries and one in Israel. When contacted by Capital, a spokeswoman for Meininger Hotels confirmed that Menon was detained by the authorities for questioning during a trip to India. “According to our current information, this arrest is in connection with investigations into past business activities in India,” said the spokeswoman. “Ajit Menon was not involved in these activities,” she further said. When asked whose business activities were being investigated, Meininger Hotels did not respond.
The Economic Crimes Department of the Mumbai Police did not immediately comment on the incident when contacted by Capital.
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According to Indian media reportsMenon was targeted by the EOW when the authority was investigating suspected bank fraud by Cox & Kings Financial Services in 2021. The company is a sister company of the insolvent tour operator Cox & Kings, which had offered foreign exchange business and financial services such as student loans in India until its liquidation. The company and its owner Kerkar are said to have defrauded the Indian Yes Bank of around 4 billion rupees, the equivalent of almost 45 million euros.
Fake accounting books?
According to the Mumbai Police, Menon was never officially appointed managing director of Cox & Kings Financial Services. But Kerkar introduced Menon as such to many people. “Ajit Menon has attended several meetings where the issue of falsifying company accounts to show that the company is in a sound financial position was discussed,” the police official said.
As a result, Cox & Kings Financial Services is said to have received a loan of Rs 4 billion. Of the loan amount, Rs 3.96 billion are said to have flowed illegally to the parent company Cox & Kings and was not used for the purpose for which it was paid out. Of the sum, 560 million rupees, or 6.2 million euros, are said to have been diverted to a company run by Menon.
The newspaper also reports that Menon headed the European operations of the Cox & Kings Group companies. Cox & Kings executives testified to Indian authorities that Menon was responsible for all transactions related to loan amounts and company policy.
When asked by Capital, Meininger Hotels did not want to answer how CEO Menon and Kerkar are connected to each other. The hotel chain’s spokeswoman simply emphasized that the matter was in no way related to Menon’s current role at Meininger Hotels: “We are in contact with the British Deputy High Commission in Mumbai to support Ajit Menon with any legal action that may arise.” The management team at Meininger Hotels is taking over ongoing activities and ensuring that all services “continue to be available without interruptions”. The Meininger headquarters acts as a service provider for the hotels and controls all administrative tasks and processes, for example sales, marketing and human resources management.
Several investigations against the head of Cox & Kings
The Menon incident appears to be in the context of a wide-ranging investigation into Cox & Kings owner Kerkar, who is already in custody. There are several proceedings underway against the insolvent and liquidated tour operator and the company’s senior executives.
According to reports, Kerkar, his wife Urshila Kerkar and others are considered accused in the case involving the sister company Cox & Kings Financial Services Ltd., which now also affects Menon. The Economic Crimes Unit in Mumbai arrested her based on a complaint filed by Ashish Vinod Joshi, the corruption watchdog of India’s Yes Bank.
The “Hindustan Times” refers to the criminal complaint: The accused pretended that the financial situation of the company was in order through false and forged purchase and sale transactions that were recorded in the company’s books in 2018 and 2019. “The company presented its false or falsified balance sheets in order to justify a high credit rating,” is an accusation from Yes Bank.
Business intertwined
The Meininger hotel chain and the tour operator Cox & Kings have been closely linked for years: The company Meininger Hotels Limited is owned by the British tourism group Holidaybreak Limited. Holidaybreak itself became a wholly owned subsidiary of former competitor Cox & Kings in 2011.
Since then, Menon has taken on important positions in the corporate network. In 2011 he became strategy director at Holidaybreak and in May 2013 deputy CEO of the tourism group. In September 2019, Menon became CEO and assumed strategic leadership of Holidaybreak and its subsidiaries. In June 2020 he was also appointed CEO of Meininger Hotels.
Source: Stern
