- ED conducted searches at nine Rajesh Exports premises in Mumbai and Bengaluru under FEMA
- Investigation found over $20 million siphoned out and 40% gold stock mismatch with records
- Rs 3,000 crore trade receivables were set off against fictitious gold imports and dubious payables
The Enforcement Directorate (ED) carried out searches at nine premises linked to Rajesh Exports in Mumbai and Bengaluru, NDTV Profit learnt from sources on Tuesday.
The searches were carried out under the Foreign Exchange Management Act (FEMA), and pertained to alleged forex rules violations by the company. The ED is searching locations associated with the company and its promoters.
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The ED's investigation revealed multiple transactions of Rajesh Exports Ltd shares by benamidaars. Over $20 million was siphoned out of the country, as per their findings. There was also a mismatch in the company's gold stock inventory with physical stock of gold found to be 40% lower than that declared in books.
The law enforcement body is currently looking into trade receivables set off against fictitious gold imports. The ED found that around Rs 3,000 crore of trade receivables were set off against gold imports, with the agency flagging this delivery as suspicious.
The economic intelligence agency also found that the firm has ostensibly invested more than Rs 1,000 crores in African gold mines, with this investment int reflecting in the books of accounts of any of its subsidiaries.
The ED also found out that about Rs 3000 crore of trade receivables and that payables were set off against four to five foreign entities with what the law enforcement agency deemed to be "dubious credentials."
The Securities And Exchange Board of India in an interim order, held that Rajesh Exports inflated its consolidated revenues by Rs 15.15 lakh crore over FY21–FY25 by attributing outsized revenues to overseas subsidiaries, particularly Switzerland-based Valcambi SA — despite the subsidiary's audited standalone financials showing a fraction of those figures.
The regulator flagged what it called a prima facie misrepresentation of the company's financial position, noting that nearly the entire reported revenue was attributed to overseas subsidiaries whose financials were not publicly available.
Rajesh Exports' founder and Chairman Rajesh Mehta denied the the firm had a discrepancy and stated that this conclusion stems from a misreading by the regulator.
"SEBI has taken the EBITDA of Valcambi and considered it as revenue. That is the entire confusion — the nucleus of the confusion," he said.
He stated that Valcambi makes up 97–99% of consolidated revenues and rejected the claim that its standalone revenue had declined as much as 0.50% of that figure.
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"That 0.50% is its Ebitda, not its revenue," Mehta clarified, adding that audited financials of Global Gold Refinery (GGR) — certified by KPMG — had been submitted to SEBI to support the firm's statement. GGR is the holding company of Valcambi.
In its interim order, SEBI barred Rajesh Exports and Mehta from accessing the securities market pending the outcome of the ongoing investigation.
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