Absent records of foreign transactions, a purported Rs 1,035-crore investment in African mines with no supporting documents, a 40% mismatch between gold stocks found during searches and those recorded in company registers. Plus a CFO who has allegedly not drawn a salary since 2020 and a Managing Director paid just Rs 17,000 a month despite the company’s reported revenues of Rs 7.7 lakh crore. And suspected siphoning of over Rs 600 crore through alleged share manipulation involving NRI benamidars.
These are among the preliminary findings cited by the Enforcement Directorate (ED) following search and seizure operations at nine premises linked to Rajesh Exports Ltd in Bengaluru and Mumbai under the Foreign Exchange Management Act (FEMA), 1999.
In a statement issued Wednesday, the ED said its ongoing investigation into the gold exporter had uncovered multiple suspected contraventions relating to overseas transactions, stock holdings and share dealings, and that various documents and digital evidence had been seized during the searches.
The agency even questioned the remuneration structure of key managerial personnel, saying it appeared inconsistent with the scale of the company’s operations.
According to the ED, the Chief Financial Officer (CFO) has not received any salary since 2020, while the Managing Director was drawing a monthly remuneration of only around Rs 17,000 despite the company reporting consolidated revenues of approximately Rs 7.7 lakh crore.
“The company’s key business indicators showed significant departures from normal commercial practices,” the ED said.
The searches, which began on June 23, were carried out at nine locations in Bengaluru and Mumbai.
Story continues below this ad
According to the ED, Rajesh Exports failed to produce documentation relating to foreign transactions, including imports, exports, overseas investments and settlement of foreign trade receivables and payables.
“The company failed to produce documentation in respect of its foreign transactions… thereby rendering verification of the genuineness of such transactions almost impossible,” the agency said.
The ED cited as an example a purported investment of Rs 1,035 crore in African mining assets, stating that contemporaneous records and supporting documentation relating to the investment were neither found during searches nor provided by the company.
The agency also flagged what it described as opaque adjustments of foreign trade receivables and payables amounting to around Rs 3,000 crore. Investigators found the company was setting off trade dues against receivables involving entities based in the UAE and other overseas jurisdictions that are now under scrutiny.
Story continues below this ad
A significant discrepancy was also detected during physical verification of inventory. According to the ED, the quantity of stock found at company premises was approximately 40 per cent lower than the stock reflected in factory records.
The investigation has also uncovered what the ED described as suspicious block trades in the company’s shares.
According to the agency, some individuals involved in these transactions feature in disclosures and leaks released by the International Consortium of Investigative Journalists (ICIJ), indicating possible undisclosed offshore links that are being examined.
The ED alleged that more than Rs 600 crore was siphoned out of India through share-manipulation transactions executed using NRI benamidars.
Story continues below this ad
Queries emailed by The Indian Express to Rajesh Exports on the ED’s claims Wednesday did not elicit a response.
The latest findings add to the regulatory scrutiny facing Rajesh Exports after the Securities and Exchange Board of India (SEBI) last week alleged that the company had overstated revenues by approximately Rs 15.15 lakh crore between FY21 and FY25. SEBI had subsequently barred promoter-chairman Rajesh Mehta and the company from accessing the securities market pending further investigation.
Rajesh Exports has denied SEBI’s allegations and maintained that its reported revenues are accurate. The company has attributed the regulator’s findings to what it described as a misunderstanding relating to the reporting of revenues and earnings figures of its Swiss subsidiary Valcambi.
