ED searches Rajesh Exports premises over ₹ 3000-cr dubious deals, gold mismatch | Today’s news
The Enforcement Directorate on Tuesday conducted searches at nine premises associated with Rajesh Exports Ltd. in Bengaluru and Mumbai as part of an ongoing investigation, with officials looking into suspicious transactions in benami shares, irregularities in gold stocks and questionable foreign transactions.
Search operations were still ongoing at the time of filing this notice.
“Investigations conducted so far have revealed several scrip transactions of Rajesh Exports through benamidars. Preliminary findings suggest that over $20 million may have been siphoned out of the country through such transactions,” an ED official said on condition of anonymity.
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According to officials, the search teams also uncovered a significant discrepancy between the company’s declared gold reserves and the physical reserves available in the searched premises.
“Physical verification carried out during the searches showed that the gold reserves found were about 40% lower than the reserves shown in the books,” the official said.
Investigators are also reviewing transactions involving nearly ₹3,000 crore in trade receivables which were allegedly adjusted against gold imports, the supply of which is under control.
“We are investigating a case where trade receivables around ₹3,000 crore has been set off against the import of gold, the supply of which appears to be suspect,” the official said.
The Bengaluru-based jeweler was under scrutiny after the Securities and Exchange Board of India (Sebi) alleged earlier this month that the company had misstated almost all of its revenue for the five financial years to FY25 of ₹15.15 trillion.
The company’s shares hit a 5% upper range and closed at ₹108.25 apiece on the BSE on Tuesday, marking a sharp recovery from the 52-week low ₹73.20 affected after regulatory action.
Another issue under investigation concerns the company’s overseas direct investment (ODI) in African gold mining assets.
“Rajesh Exports has reportedly invested more than ₹1000 crore in African gold mines. However, this investment is not reflected in the books of accounts of any of its subsidiaries and is therefore under scrutiny,” the official said.
The Financial Crimes Enforcement Agency is also investigating whether Rajesh Exports group firms are quietly adjusting mutual fees with UAE-based entities to hide the real movement of money.
“Physical verification carried out during the searches showed that the gold reserves found were about 40% lower than the reserves shown in the books,” the official said.
Investigators are also reviewing transactions involving nearly ₹3,000 crore in trade receivables which were allegedly adjusted against gold imports, the supply of which is under control.
“We are investigating a case where trade receivables around ₹3,000 crore has been set off against the import of gold, the supply of which appears to be suspect,” the official said.
The Bengaluru-based jeweler was under scrutiny after the Securities and Exchange Board of India (Sebi) alleged earlier this month that the company had misstated almost all of its revenue for the five financial years to FY25 of ₹15.15 trillion.
The company’s shares hit a 5% upper range and closed at ₹108.25 apiece on the BSE on Tuesday, marking a sharp recovery from the 52-week low ₹73.20 affected after regulatory action.
Another issue under investigation concerns the company’s overseas direct investment (ODI) in African gold mining assets.
“Rajesh Exports has reportedly invested more than ₹1000 crore in African gold mines. However, this investment is not reflected in the books of accounts of any of its subsidiaries and is therefore under scrutiny,” the official said.
The Financial Crimes Enforcement Agency is also investigating whether Rajesh Exports group firms are quietly adjusting mutual fees with UAE-based entities to hide the real movement of money.
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“O ₹3,000 crore in trade receivables and trade payables appears to have been adjusted against four to five UAE-based foreign entities of dubious credentials. The nature and purpose of these transactions are being investigated,” the official added.
The agency is expected to analyze the documents, digital records and financial data seized during the searches before taking further action.
Emails sent to Rajesh Exports and the investigating agency remained unanswered till press time.
The regulatory action against Rajesh Exports by the Enforcement Directorate follows an interim order on June 3 by Sebi. The 109-page interim ex-parte order cited diversion of funds, opaque related party transactions and inadequate information on two companies – Elest Pvt Ltd and ACC Energy Storage Pvt Ltd – both related to Rajesh Exports.
The company was also selected to develop 5 gigawatt-hours worth of battery capacity in exchange for government incentives to sell under ₹18,100 crore Manufacturing Scheme for Advanced Chemistry Cells (PLI-ACC).
It is certain that no funds have yet been paid out to any beneficiary under this scheme. Mint had earlier reported that the Ministry of Heavy Industries, which runs PLI-ACC, will be inviting participation from Rajesh Exports in the coming days.
Read also | Future of Rajesh Exports PLI-ACC to be decided this week
