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

The Directorate of Enforcement (ED) on Wednesday said searches at premises linked to Rajesh Exports Ltd (REL) in Bengaluru and Mumbai have unearthed multiple suspected violations under the Foreign Exchange Management Act (FEMA), including missing records of overseas transactions, around Rs 3,000 crore in opaque trade set-offs, a 40% stock mismatch and alleged share manipulation involving offshore benamidars.

The ED said it conducted search and seizure operations at nine premises on June 23 in connection with an ongoing investigation into Rajesh Exports and connected persons for suspected contraventions of FEMA provisions.

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

According to the agency, REL "failed to produce documentation in respect of its foreign transactions, including its imports, exports, overseas investments and the settlement of foreign trade receivables and payables, thereby rendering verification of the genuineness of such transactions almost impossible."


The agency said that contemporaneous records and documentation relating to a claimed investment of Rs 1,035 crore in African mines "were neither found nor provided by the company as yet".

Rs 3,000 crore trade set-offs under scanner

The ED said the company was found to be engaged in "setting off of trade payables and trade receivables from suspicious foreign parties based in the UAE and other overseas jurisdictions" involving around Rs 3,000 crore.

Physical verification during the searches also revealed a stock discrepancy, with investigators finding "a difference of approximately 40% between the stock recorded in the factory registers and the actual physical stock found at the premises".

Also read: Explained: Inside Sebi's Rs 15.15 lakh crore revenue inflation allegations against Rajesh Exports

Share manipulation, offshore links probed

The agency further said its investigation had uncovered suspicious block trades in REL shares executed by certain individuals whose names also appear in leaks released by the International Consortium of Investigative Journalists (ICIJ), indicating "possible undisclosed offshore links, which are under examination".

According to the ED, the probe revealed that "over Rs. 600 Crore were siphoned out of India through share-manipulation using NRI benamidars".

The agency also flagged unusual remuneration patterns within the company, saying its chief financial officer has not received any salary since 2020, while its managing director was paid only about Rs 17,000 per month despite the company reporting consolidated revenue of approximately Rs 7.7 lakh crore.

The ED said various incriminating documents and digital evidence had been seized and recovered during the searches and that further investigation is underway.