Bengaluru: Fresh scrutiny has intensified around Rajesh Exports after the Enforcement Directorate (ED) uncovered a series of unusual financial and operational practices during searches conducted at premises linked to the company. Among the findings highlighted by the agency were the absence of salary payments to the company’s Chief Financial Officer (CFO) since 2020 and a monthly remuneration of only around Rs 17,000 to the Managing Director (MD), despite the company reporting consolidated revenue of approximately Rs 7.7 lakh crore.

The searches were conducted at nine locations in Bengaluru and Mumbai following regulatory action initiated by the Securities and Exchange Board of India (SEBI) against Rajesh Exports and its promoter, Rajesh Mehta. The ED said its ongoing investigation has raised serious concerns regarding foreign transactions, stock records and alleged fund diversion.

ED flags unusual remuneration structure

One of the key observations made by the Enforcement Directorate relates to the compensation paid to senior management personnel.

According to the agency, the company’s CFO has reportedly not received any salary since 2020. At the same time, the Managing Director was paid only about Rs 17,000 per month despite the company reporting revenues running into several lakh crore rupees.

The ED noted that such remuneration levels appear inconsistent with the scale of the company’s operations and financial disclosures. Investigators are examining whether these practices indicate deeper governance or compliance issues within the organisation.

The agency stated that several business indicators showed significant departures from what would typically be expected in a company of this size and operational scale.

Foreign transaction records unavailable

Another major concern highlighted by investigators is the alleged lack of documentation relating to foreign transactions.

The ED said Rajesh Exports was unable to provide adequate records concerning imports, exports, overseas investments and settlement of international trade receivables and payables. This has reportedly made it difficult for investigators to verify the authenticity and legitimacy of various cross-border transactions.

According to the agency, documentation relating to a claimed investment of approximately Rs 1,035 crore in African mining assets was not found during the searches and had not been provided to investigators at the time of the statement.

Officials said the absence of supporting records raises questions regarding the nature and purpose of these overseas investments.

Rs 3,000 crore foreign trade adjustments under scrutiny

The investigation has also focused on the company’s handling of trade receivables and payables involving overseas entities.

The ED identified what it described as opaque netting and set-off arrangements involving nearly Rs 3,000 crore. According to investigators, foreign trade receivables were allegedly adjusted against trade payables involving entities based in the United Arab Emirates and other foreign jurisdictions.

Authorities are examining whether these transactions were conducted in accordance with applicable regulations and whether the overseas counterparties were genuine business entities.

The agency stated that the nature of these transactions has complicated efforts to establish a clear audit trail.

Stock discrepancy of nearly 40 per cent detected

During the search operation, officials conducted physical verification of stock held at company facilities.

According to the ED, a discrepancy of nearly 40 per cent was discovered between inventory recorded in factory registers and the stock physically present at the premises.

Such a significant variation has prompted further examination of inventory management practices and accounting records maintained by the company.

Investigators are now analysing documents and digital records seized during the searches to determine whether the discrepancy resulted from procedural lapses or points to more serious irregularities.

Alleged share manipulation and offshore links

The agency has also flagged certain stock market transactions involving Rajesh Exports shares.

According to the ED, suspicious block trades were executed by individuals whose names reportedly appear in documents released by the International Consortium of Investigative Journalists (ICIJ). Investigators are examining possible offshore connections linked to these transactions.

The probe has further revealed allegations that more than Rs 600 crore may have been siphoned out of India through share manipulation involving alleged NRI benami entities.

Authorities are analysing transaction records, ownership structures and financial flows to determine whether any violations of financial regulations occurred.

Investigation continues

The Enforcement Directorate has confirmed that numerous documents and digital devices were seized during the searches. These materials are currently being examined as part of the ongoing investigation.

The case adds to growing regulatory scrutiny surrounding Rajesh Exports and follows SEBI’s interim action against the company and its promoter. No final conclusions have been reached, and the investigation remains ongoing.

Conclusion

The ED’s findings have raised significant questions about governance practices, foreign transactions, inventory records and share trading activities linked to Rajesh Exports. As investigators continue to analyse the seized evidence, the outcome of the probe could have important implications for the company, its management and investors. Further developments are expected as authorities complete their examination of the financial and operational records.