A day after pan-India searches at premises of Rajesh Exports Ltd, the Enforcement Directorate (ED) on Wednesday accused the gold refiner and jewellery manufacturer of indulging in “significant departures” from normal commercial practices such as not keeping transaction records, contravening provisions the Foreign Exchange Management Act (FEMA).
The sleuths carried out searches across nine locations in Bengaluru and Mumbai following an accounting investigation by the Securities and Exchange Board of India (SEBI) which revealed that the company inflated its consolidated revenue by an unprecedented Rs 15.15 lakh crore ($159 billion) between FY21 and FY25, primarily through its Swiss refining unit, Valcambi.
The ED charged Rajesh Exports failed to produce critical documentation for its imports, exports, overseas investments, and foreign trade settlements, making it nearly impossible to verify the legitimacy of its transactions.
Rajesh Exports is yet to offer reaction on ED action.
According to the ED, investigators found no records to back up a claimed ₹1,035 crore ($109.33 million) investment into African mines. Furthermore, the agency uncovered roughly ₹3,000 crore ($316.91 million) in opaque trade set-offs involving “suspicious” foreign entities based in the UAE and other overseas jurisdictions.
The ED flagged several bizarre internal business indicators that defy standard corporate practices. Despite the company reporting massive consolidated revenues, the agency found that the Chief Financial Officer (CFO) has allegedly not received a salary since 2020. While, the Managing Director was being paid a meager ₹17,000 per month.
The agency also noted a severe 40 per cent mismatch between the physical gold stock found at the factory premises and actual record in the company’s registers.
The probe is also looking into capital markets fraud. The ED alleged that over ₹600 crore was siphoned out of India via stock manipulation executed through non-resident Indian (NRI) benamidars (proxy entities).
Additionally, investigators detected suspicious block trades in REL stock tied to individuals named in global offshore tax haven leaks by the International Consortium of Investigative Journalists (ICIJ), pointing to undisclosed offshore links.