A day after Enforcement Directorate (ED) began search and seizure operations under the Foreign Exchange Management Act (FEMA) on nine premises of Rajesh Exports in Bengaluru and Mumbai, the central agency on Wednesday said it found the company paid disproportionate remuneration to its senior executives.
ED said the company reported consolidated revenue of nearly Rs7.7 lakh crore, but did not pay salary to its chief financial officer (CFO) since 2020, while the managing director (MD) received Rs17,000 per month.
Rajesh Exports was barred by the Securities and Exchange Board of India (SEBI) in early June, alleging large-scale financial misrepresentation, disclosure lapses and non-cooperation with an investigation into the company's financial statements. The SEBI alleged that the Bengaluru-based jewellery export company had misrepresented Rs15.15 lakh crore of revenues attributable to subsidiaries during FY21-FY25, representing about 99.8% of such revenues.
ED said the company failed to produce documentation of its foreign transaction, including its imports, exports, overseas investments and the settlement of foreign trade receivables and payables. “For example, contemporaneous records and documentation of claimed investment of Rs1,035 crore into African Mines were neither found nor provided by the company as yet.”
The company is found to have opaque netting/set-offs of large foreign trade receivables against foreign trade payables of about Rs3,000 crore of parties based in the UAE and other jurisdictions.
“Physical verification of stock carried out during the search revealed a difference of nearly 40% between the stock recorded in the factory registers and the actual physical stock found at the premises,” the ED added.
The investigation has revealed suspicious block trades in the scrip of REL executed by certain individuals whose names also figure in the leaks released by the International Consortium of Investigative Journalists (ICIJ), indicating possible undisclosed offshore links, which are under examination, the ED added.
“For example, it was revealed that over Rs 600 Crore were siphoned out of India through share-manipulation using NRI benamidars.”
