SFIO to probe Rajesh Exports over SEBI's fraud allegations

New Delhi: The Serious Fraud Investigation Office (SFIO) will soon launch a probe into Rajesh Exports, the gold refining and jewellery manufacturing company facing allegations of financial irregularities by market regulator Sebi.

The ministry of corporate affairs has ordered an SFIO investigation, according to people familiar with the matter.

The SFIO is typically tasked with investigating complex corporate frauds.


Also Read: Rajesh Exports under ED lens after probe finds missing records and Rs 3,000 crore opaque transactions

Under Section 212 of the Companies Act, 2013, the government can order an SFIO probe after examining reports from the registrar of companies or in the public interest.

In an interim order on June 3, Sebi alleged that Rajesh Exports inflated its consolidated revenue over five years by attributing substantial revenue to overseas subsidiaries, particularly Switzerland-based Valcambi SA, even though the subsidiary's audited standalone financial statements showed only a fraction of those amounts. The regulator also barred the company's promoter from buying, selling or dealing in the company's securities pending further proceedings.

The company has denied any wrongdoing.

"There are no issues in the whole matter. It is only a question of interpreting the numbers," a Rajesh Exports official told ET, adding that the company expects to address all concerns in the coming days.

The move comes soon after the Enforcement Directorate searched nine premises linked to the Bengaluru-headquartered company under the Foreign Exchange Management Act (FEMA).

In a statement on Wednesday, the agency said the company's key business indicators showed "significant" departures from normal commercial practices, along with the non-availability of records relating to foreign transactions.

Also Read: Rajesh Exports' troubles deepen with ED searches amid Rs 15 lakh crore revenue row

It said Rajesh Exports had "failed" to provide documentation related to its foreign transactions, including imports, exports, overseas investments and the settlement of foreign trade receivables and payables, making it difficult to verify the genuineness of those transactions.

"For example, contemporaneous records and documentation of the claimed investment of ₹1,035 crore into African mines were neither found nor provided by the company as yet," the agency said.