ED Tightens Probe Into Rajesh Exports Over Suspected FEMA Violations

27 June : The Enforcement Directorate (ED) has intensified its investigation into Rajesh Exports, one of India’s largest gold refiners, following searches conducted at multiple company-linked premises on 23 June.

The agency, which is investigating the matter under the Foreign Exchange Management Act (FEMA), 1999, seized digital devices, financial documents, and electronic records that allegedly point to significant financial irregularities.

Among the findings, investigators flagged the remuneration of the company’s senior management.

Despite reporting a consolidated turnover of nearly ₹7.7 lakh crore, Rajesh Exports has reportedly not paid its Chief Financial Officer a salary since 2020, while the company pays its Managing Director a monthly salary of just ₹17,000, according to the ED.

The agency believes these figures warrant closer scrutiny as part of its wider investigation.

The probe is primarily focused on the company’s foreign transactions. According to the ED, Rajesh Exports has failed to provide essential records relating to imports, exports, foreign investments and payment settlements, making it difficult to verify several overseas transactions.

The agency also alleges that the company has not submitted supporting documents for investments worth around ₹1,035 crore in African gold mining projects.

Investigators are also examining adjustments involving nearly ₹3,000 crore in foreign trade receivables and payables, suspecting that the company routed the funds through shell companies linked to the United Arab Emirates and other tax haven jurisdictions.

Inventory and Share Dealings Examined

The ED has also reported a nearly 40 per cent mismatch between the company’s recorded inventory and the physical stock found during inspections.

Officials claim this discrepancy has raised concerns over the accuracy of the firm’s financial records.

Investigators are further examining a series of suspected block deals in Rajesh Exports’ shares, alleging that those involved used them to influence market prices.

The ED suspects that operators used a network of benami NRI accounts to facilitate transactions and allegedly transferred more than ₹600 crore out of India.

Rajesh Exports had previously come under regulatory scrutiny after SEBI alleged that the company reported fake exports worth ₹15.15 lakh crore.

The regulator issued an interim order against the company and its promoter, Rajesh Mehta, restricting trading in the firm’s shares while the investigation remains underway.

The company, founded in Bengaluru in 1989, has since grown into one of the world’s leading integrated gold refining and export businesses.