Many of the world’s biggest companies also have certain businesses that are different from their core businesses, and in the case of Thomas Cook, it is their foreign exchange business. Considering the fact that it is one of the world’s biggest travel companies, it is not a surprise that the company is involved in the foreign exchange business. In a new development, the Indian arm of Thomas Cook has been beset with allegations of a foreign exchange scam and the company has rushed to deny those allegations swiftly. It is being alleged that the foreign exchange reserves to the tune of Rs. 14.7 crore at the Kochi International Airport has been breached, and the company is responsible for it. Needless to say, the shares of Thomas Cook India soon tanked as the news spread and at one point had nosedived by as much as 2%.
The allegation against Thomas Cook is that of misappropriation of funds, and it is a serious allegation. On top of that, the Air Customs Intelligence Department has initiated a probe into the company’s conduct. The Air Customs Intelligence Department has also contacted the Reserve Bank of India, India’s central bank and asked to cancel the licenses held by Thomas Cook. Thomas Cook operates kiosks in airports by way of which it grants foreign exchange to foreigners, and it is being alleged that the misappropriation stems from there.
However, in such a situation, it is highly damaging for a company to not make a statement regarding the situation, and Thomas Cook India’s statement was a belligerent one. It denied any wrongdoing and stated that the company had handed over all relevant information to the concerned authorities. In its statement, Thomas Cook stated, “We unequivocally refute the stories that have appeared in the media with respect to our foreign exchange counter at Kochi airport. We categorically state that basis a request received from customs representatives at Kochi Airport on April 26, 2019, transactional information for a two year period was provided by us within the agreed timeframe.” It remains to be seen how the market reacts to this statement from the company.