The searches began on June 23, 2026, and are linked to suspected contraventions of FEMA provisions, the agency said. The investigation has identified multiple issues.
First, the Enforcement Directorate said there was a non-availability of records of foreign transactions. Rajesh Exports failed to produce documentation relating to its foreign transactions, including imports, exports, overseas investments, and settlement of foreign trade receivables and payables, making verification of the genuineness of such transactions difficult.
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“For example, contemporaneous records and documentation of claimed investment of ₹1,035 Crore into African Mines were neither found nor provided by the company as yet,” the Enforcement Directorate said.
Second, the Enforcement Directorate flagged opaque netting and set-offs of foreign trade receivables against payables of around ₹3,000 crore. It said the company was engaged in setting off trade payables and receivables from foreign parties based in the UAE and other jurisdictions.
Third, it said, “Stock discrepancy: Physical verification of stock carried out during the search revealed a difference of approximately 40% between the stock recorded in the factory registers and the actual physical stock found at the premises.”
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Fourth, the agency pointed to disproportionate remuneration of key personnel. It noted deviations from normal commercial practices, including that the Chief Financial Officer (CFO) had not received any salary since 2020, while the Managing Director (MD) was paid about ₹17,000 per month, despite consolidated revenue of approximately ₹7.7 lakh crore.
Fifth, the Enforcement Directorate flagged suspicious block trades and possible share manipulation. It said certain individuals involved in the trades figure in leaks released by the International Consortium of Investigative Journalists (ICIJ), indicating possible undisclosed offshore links under examination. It added that over ₹600 crore was allegedly siphoned out of India through share manipulation using NRI benamidars.
Trouble began for Rajesh Exports after the Sebi recently alleged that the company had a suspected consolidated revenue inflation of up to ₹15.15 lakh crore for the 2020-21 to 2024-25 fiscal years.
Sebi, in an interim order dated June 3, held that REL allegedly inflated its consolidated revenue over five years by attributing massive revenues to overseas subsidiaries, particularly Switzerland-based Valcambi SA, despite the subsidiary’s audited standalone financial statements showing only a fraction of those amounts.
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The regulator raised serious concerns over misrepresentation of the company’s financial position, noting that almost the entire of REL’s reported revenues was attributed to overseas subsidiaries whose financial statements were not made publicly available.
Sebi directed REL to cooperate with the investigating authority, submit requisite documents and explanations within 30 days and make true and fair disclosures in its financial statements, related-party transactions and other filings. It also barred Mehta from buying, selling or dealing in the company’s own securities pending further proceedings.
Mehta denied any manipulation in revenue figures. “If anybody wants to inflate, they will inflate their bottom line. They will inflate their profit to get some benefits. If they have alleged or observed an inflation of top line, which is absolutely no use for anybody.”
Shares of Rajesh Exports Ltd ended at ₹102.85, down by ₹5.40, or 4.99%, on the BSE.
