A ₹7.7 lakh crore company. A Managing Director paid ₹17,000 a month. A CFO with zero salary since 2020. The Enforcement Directorate’s probe into Rajesh Exports has uncovered financial irregularities that defy commercial logic.
Introduction
₹7.7 lakh crore in revenue. A Managing Director paid ₹17,000 per month. A CFO who has not received a salary since 2020. Missing records of foreign transactions. A 40% stock mismatch. ₹3,000 crore in opaque trade set-offs with suspicious foreign parties.
The Enforcement Directorate (ED) has uncovered a web of financial irregularities at Rajesh Exports Limited that defies commercial logic. The investigation, conducted under the Foreign Exchange Management Act (FEMA), 1999, has flagged multiple suspected violations.
This article analyzes the ED’s findings, the background of the case, and the implications for corporate governance in India.
The Investigation: ED Searches at Nine Locations
Date: June 23, 2026
Locations: Nine premises in Bengaluru and Mumbai
Authority: Enforcement Directorate (ED)
Legal framework: Foreign Exchange Management Act (FEMA), 1999
Status: Ongoing investigation
The company: Rajesh Exports Limited (REL)—a gold refining and jewellery manufacturing company with consolidated revenue of approximately ₹7.7 lakh crore .
The ED’s Key Findings
The Compensation Anomaly
The investigation highlighted extreme abnormalities in the remuneration of the company’s senior management. Despite Rajesh Exports reporting an astronomical consolidated revenue of approximately ₹7.7 lakh crore, its executive payroll completely defied commercial logic .
| Position | Salary | Details |
|---|---|---|
| Chief Financial Officer (CFO) | ₹0 since 2020 | Has received no salary since 2020 |
| Managing Director (MD) | ₹17,000 per month | Paid approximately ₹17,000 per month |
The question: How does a company with ₹7.7 lakh crore in revenue justify paying its MD ₹17,000 a month? This is not a cost-cutting measure—it is a departure from normal commercial practices .
The Background: SEBI’s Allegation of $159 Billion Revenue Inflation
The ED probe follows an investigation by India’s markets regulator, the Securities and Exchange Board of India (SEBI), into the gold company. SEBI alleged that the firm overstated revenue at its Swiss refining unit Valcambi by $159 billion—a figure unprecedented in India’s accounting probes .
The Valcambi connection:
Rajesh Exports acquired Valcambi, one of the world’s largest refiners of precious metals, in 2015 for $400 million. According to SEBI, the majority of the group’s reported turnover came from foreign subsidiaries, particularly Valcambi .
The accounting method in question:
Valcambi records revenue from refining services—the work it performs on gold. According to the Indian regulator, Valcambi generated CHF358 million in revenue over five years from its services. However, through a Lucerne-based holding company, the Indian owners allegedly recorded the value of the gold sales as revenue rather than only the value added by the refining work .
The impact: SEBI said Rajesh Exports allegedly inflated its reported revenue by ₹15.15 lakh crore ($158.93 billion) between April 2020 and March 2025 .
The Missing Records Issue
The ED found that Rajesh Exports “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” .
Key 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 implication: Without proper documentation, the genuineness of cross-border transactions cannot be verified. This is a serious violation under FEMA.
The Trade Set-Offs
The ED alleged that Rajesh Exports engaged in setting off trade payables and trade receivables from suspicious foreign parties based in the UAE and other overseas jurisdictions. The amount involved is approximately ₹3,000 crore .
What this means:
- The company was netting off large foreign trade receivables against foreign trade payables
- The parties involved were based in jurisdictions known for opaque financial structures
- This practice rendered verification of the genuineness of transactions almost impossible
The Stock Mismatch
Physical verification of stock during the search revealed a difference of approximately 40% between the stock recorded in the factory registers and the actual physical stock found at the premises .
The implication: This indicates either:
- Inaccurate record-keeping
- Potential theft or diversion of gold
- Deliberate inflation of inventory figures
The Share Manipulation Allegations
The ED investigation revealed 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 .
The scale: Over ₹600 crore were siphoned out of India through share manipulation using NRI benamidars (proxy owners) .
The mechanism:
- Suspicious block trades in REL shares
- Use of NRI benamidars to mask ownership
- Funds siphoned out of India through share manipulation
The Company’s Response
Rajesh Exports Chairman Rajesh Mehta denied any fund diversion or wrongdoing. He said the company would fully cooperate with the fresh forensic audit ordered by SEBI and not challenge the market regulator’s interim order against it .
Previous statement: When SEBI’s preliminary findings were released, Mehta told Reuters, “There seems to be some miscommunication with SEBI and a gap of information. The financials are perfect” .
Valcambi’s position: Valcambi declined to comment, stating that the case concerns the controlling shareholder .
The Broader Context
Regulatory and Legal Implications
FEMA violations:
The ED investigation under FEMA, 1999, could result in:
- Penalties for contravention of FEMA provisions
- Seizure of assets
- Prosecution of individuals involved
SEBI action:
SEBI’s investigation into the $159 billion revenue inflation could result in:
- Trading bans
- Fines
- Disgorgement of illicit gains
- Potential criminal proceedings
Corporate governance failures:
The investigation raises serious questions about:
- The company’s internal controls
- The role of auditors
- The effectiveness of board oversight
- The accuracy of financial disclosures
What This Means for Investors
| Impact | Details |
|---|---|
| Share price | Already down 80% over three years; further volatility expected |
| Investor confidence | Eroded by allegations of massive fraud |
| Regulatory risk | Potential penalties and legal proceedings |
| Recovery | Uncertain, depending on investigation outcome |
The warning for investors:
When a company with ₹7.7 lakh crore in revenue pays its MD ₹17,000 a month, when foreign transaction records are “missing,” when there is a 40% stock mismatch, and when ₹600 crore is allegedly siphoned out through share manipulation, the warning signs are clear.
Conclusion
The Enforcement Directorate has conducted searches at nine locations in Mumbai and Bengaluru linked to Rajesh Exports Limited, uncovering multiple suspected violations under the Foreign Exchange Management Act (FEMA), 1999 .
The investigation has revealed:
- Missing records of foreign transactions
- ₹3,000 crore in opaque trade set-offs involving suspicious foreign parties based in the UAE
- A 40% stock mismatch
- No documentation for a claimed ₹1,035 crore investment in African mines
- Suspicious block trades and share price manipulation
- Over ₹600 crore siphoned out of India through share manipulation using NRI benamidars
The compensation anomaly: the CFO has received zero salary since 2020, and the Managing Director has been paid only ₹17,000 per month, despite the company reporting consolidated revenue of approximately ₹7.7 lakh crore .
The ED probe follows a SEBI investigation that alleged the company overstated revenue at its Swiss refining unit Valcambi by $159 billion—a figure unprecedented in India’s accounting probes .
Various incriminating documents and digital evidence have been seized and are being examined. The investigation is ongoing .
When a company with ₹7.7 lakh crore in revenue pays its MD ₹17,000 a month, something is fundamentally wrong. The question is: what else is hiding beneath the surface?
KNOWLEDGE CHECK QUIZ
Q: Under what specific legislative act did the Enforcement Directorate (ED) conduct its June 2026 searches at Rajesh Exports Limited? Ans: The Foreign Exchange Management Act (FEMA), 1999.
Q: What massive revenue inflation allegation did SEBI previously level against Rajesh Exports regarding its Swiss unit, Valcambi? Ans: SEBI alleged that Rajesh Exports inflated its reported revenue by $159 billion (₹15.15 lakh crore) by improperly recording the gross value of gold sales as revenue, rather than just the value-add of the refining services.
Q: What extreme compensation anomaly did the ED highlight regarding the senior management of this ₹7.7 lakh crore company? Ans: The Managing Director was paid a mere ₹17,000 per month, and the Chief Financial Officer (CFO) had received zero salary since 2020, completely defying standard commercial logic.
Q: How did the ED describe the ₹3,000 crore trade set-offs executed by Rajesh Exports? Ans: The ED characterized them as opaque trade set-offs involving suspicious foreign parties based in the UAE and other jurisdictions, which rendered the verification of the genuineness of the transactions almost impossible.
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FREQUENTLY ASKED QUESTIONS (FAQ)
Q: What is a “Trade Set-Off” and why did it trigger a FEMA investigation? Ans: A trade set-off occurs when a company balances the money it owes a foreign supplier against the money owed to it by a foreign buyer, without actual currency crossing borders. While permitted by the RBI under strict conditions, doing so without maintaining the rigorous, contemporaneous documentation (invoices, customs bills) required to prove the underlying trade is genuine constitutes a severe violation of FEMA, as it is a common methodology for trade-based money laundering.
Q: What is a “Benamidar” in the context of share manipulation? Ans: A “Benamidar” is a proxy or a front person who holds an asset (in this case, shares in REL) nominally, while the actual control and financial benefit belong to a hidden, ultimate beneficial owner. The ED alleged that NRI benamidars executed suspicious block trades to siphon over ₹600 crore out of India.
Q: Why is a 40% physical stock mismatch critical in a gold refining business? Ans: Gold is a highly liquid, high-value asset. A 40% discrepancy between the factory register and the physical vault indicates that massive quantities of gold have either been smuggled out, sold off the books (creating black money), or that the company was artificially inflating its inventory numbers on paper to secure larger bank loans.
Adv. Shoeb Hakim
Financial Crime & Corporate Governance Advisor
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Disclaimer: This article is for informational purposes only and does not constitute legal advice.
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