Enforcement Directorate (ED) has launched a massive search operation across nine premises linked to gold exporter Rajesh Exports Ltd (REL) and its promoters in Bengaluru and Mumbai.
The coordinated raids come on the heels of a damning interim order by the Securities and Exchange Board of India (SEBI), which accused the company of executing a historic accounting fraud. The ED’s intervention escalates the probe into the realm of criminal fund diversion and foreign exchange violations under the Foreign Exchange Management Act (FEMA).
1. Shocking Findings from the ED Raids
As investigators combed through the corporate headquarters and promoter properties, they uncovered deep discrepancies between the company’s regulatory filings and physical realities:
- Missing Gold Reserves: The ED’s physical inventory audit revealed that Rajesh Exports’ actual physical stock of gold was roughly 40% lower than the asset quantities officially declared in its books of accounts.
- Offshore Siphoning via Proxies: Investigators found evidence of high-volume stock trading executed through benamidars (proxy entities). Preliminary tracking suggests more than $20 million (approx. ₹167 crore) was illicitly siphoned out of India via these loops.
- Suspicious “Netting Off” Schemes: The agency flagged ₹3,000 crore in trade receivables that the firm mysteriously set off against gold imports involving four to five shell companies in the UAE with highly dubious credentials. Investigators suspect the imports were completely fabricated to obscure the outward movement of money.
- The Untraceable African Mines: REL reportedly claimed to have invested over ₹1,000 crore in African gold mining ventures. However, the ED noted that this massive capital deployment completely failed to reflect in the financial statements or books of any of its overseas subsidiaries.
┌──► Physical Gold Inventory: Found to be 40% lower than book claims
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[ED Enforcement Action] ───┼──► Benami Stock Deals: Over $20 Million suspected to be siphoned abroad
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└──► Dubious Book Offsets: ₹3,000Cr in trade receivables netted off against fake imports
2. The SEBI Trigger: The ₹15.15 Lakh Crore Mirage
The ED’s sudden enforcement blitz was triggered directly by a explosive 109-page ex-parte interim order issued by SEBI. The market regulator laid bare a structural system of artificial book-padding:
The Revenue Inflation: SEBI alleged that Rajesh Exports inflated its consolidated revenues by an astonishing ₹15.15 lakh crore between FY21 and FY25.
The regulator found that 97% to 99% of the revenues the company attributed to its high-profile overseas subsidiaries—specifically the Switzerland-based gold refinery Valcambi SA—simply did not exist on the subsidiary’s standalone audited financials.
Furthermore, a deep-dive audit into REL’s domestic transactions showed it claimed to buy and sell thousands of crores worth of gold through a broker called Affluence Shares and Stocks. When questioned by SEBI, the brokerage firm flatly denied ever executing any bulk gold trades for Rajesh Exports.
| Regulatory Body | Key Allegation / Finding | Action Taken |
| SEBI | Fabricated ₹15.15 lakh crore in global revenues via circular trading; routed ₹338 crore to the promoter’s personal accounts. | Barred Chairman Rajesh Mehta from buying, selling, or dealing in the securities market until further notice. |
| ED | 40% physical gold shortage; untraceable ₹1,000 crore African mining investments; FEMA violations. | Conducted active multi-city raids across 9 corporate and promoter premises to seize digital logs and records. |
3. Escalating Corporate and Debt Crises
The combined SEBI and ED onslaught marks a complete downfall for one of India’s largest standalone gold refiners and exporters.
Beyond market regulators, the company is facing an aggressive debt collection squeeze. Canara Bank has dragged Rajesh Exports to the Debt Recovery Tribunal (DRT) in Chennai to recover ₹2,458 crore in outstanding corporate defaults. While the company’s directors had tried to block the bank with a counter-suit, the tribunal dismissed their claims after determining the firm had submitted entirely fabricated invoices to hide the fact that Canara Bank loan liquidity was being diverted straight out of India into Valcambi SA in Switzerland.
The Corporate Defense: For its part, Rajesh Exports and Managing Director Rajesh Mehta have maintained their innocence, issuing exchange filings claiming that their reported numbers are completely genuine. The company argued that SEBI’s staggering billion-dollar fraud conclusion is simply a “communication gap” and a mathematical misunderstanding between basic revenue figures and EBITDA calculations. However, with physical gold missing from its vaults and offshore fund trails under active freeze, the Ministry of Corporate Affairs is reportedly weighing a permanent removal of the company from India’s green-energy PLI (
