Enforcement Directorate Investigates Rajesh Exports Amid Regulatory Scrutiny

The Enforcement Directorate (ED) has launched an investigation into Rajesh Exports Ltd under the Foreign Exchange Management Act (FEMA), 1999, following searches at nine locations in Bengaluru and Mumbai. Preliminary findings highlight major irregularities, including the absence of documentation for foreign transactions, a questionable Rs 1,035-crore investment in African mining assets, and a 40% discrepancy in physical gold stock compared to company registers. Investigators further flagged suspicious remuneration practices, noting the Managing Director reportedly receives a monthly salary of only Rs 17,000 despite the firm’s massive reported revenue.

This investigation intensifies the mounting regulatory pressure on the company. Last week, the Securities and Exchange Board of India (SEBI) alleged that Rajesh Exports overstated revenues by approximately Rs 15.15 lakh crore between FY21 and FY25. SEBI has subsequently barred the promoter-chairman, Rajesh Mehta, and the company from accessing the securities market pending further inquiry. Rajesh Exports has contested these allegations, attributing the discrepancies to misunderstandings regarding revenue reporting for its Swiss subsidiary, Valcambi.

Following the latest developments, the company's shares hit the lower circuit on major exchanges. The ED probe also points toward potentially siphoning more than Rs 600 crore through share manipulation involving NRI benamidars, with some linked to disclosures from the International Consortium of Investigative Journalists (ICIJ). Investors are reacting sharply to the compounding legal and financial scrutiny, leading to significant volatility in the stock price as the company remains under active multi-agency investigation.