Rajesh Exports: ED raids 9 sites under FEMA in 2026

What triggered the ED action

The Enforcement Directorate (ED) conducted searches at premises linked to Rajesh Exports in Mumbai and Bengaluru on June 23, 2026, according to official and media sources. The action was taken under the Foreign Exchange Management Act (FEMA) over suspected breaches of foreign exchange rules involving the company and its promoters. The development comes against the backdrop of an interim order by the Securities and Exchange Board of India (SEBI), which has been examining alleged financial irregularities at the Bengaluru-headquartered gold refining and jewellery manufacturing company.

Sources cited by NDTV Profit said the ED covered nine locations in the two cities. Separate reports also described premises connected to the company and its promoters being searched. A response from the company on the ED searches was reported as awaited in one dispatch, while other reports noted that founder and Chairman Rajesh Mehta has denied wrongdoing.

Where searches were conducted and under what law

Officials said the searches covered locations linked to Rajesh Exports in Bengaluru and Mumbai. The agency’s action was understood to be under FEMA, which governs cross-border payments and foreign exchange transactions. The stated focus, as reported by sources, was suspected contraventions involving foreign exchange outflows and transactions connected to overseas entities.

The ED’s FEMA probe is separate from SEBI’s market-related investigation, but both are tied to concerns raised about the company’s disclosures and transactions. The searches mark a material escalation because they bring in an enforcement agency that examines potential foreign exchange violations, in addition to the securities regulator’s scrutiny.

Allegations cited by investigators: benami share transactions and overseas outflows

According to officials quoted in reports, the ED’s probe uncovered share transactions executed through proxy holders or benamidars. Investigators alleged that these transactions were used to move money out of India. The alleged amount transferred abroad was stated as more than USD 20 million.

Reports also said the agency is examining cases in which trade receivables were adjusted against purported gold imports. Investigators view these offsets as potentially fabricated, and are examining whether delivery relating to these imports was suspicious.

Gold inventory mismatch flagged

One of the sharper concerns reported from the searches was a mismatch between physical inventory and what was recorded in the company’s books. Officials alleged that the physical gold inventory was about 40% lower than the quantities shown in records.

Inventory mismatches in precious metals businesses can raise questions around documentation, custody, and reconciliation practices, and they can also become a key line of inquiry when agencies test whether underlying trade flows match accounting entries.

Trade receivables, payables and overseas entities under the scanner

Officials said the agency is examining whether about Rs 3,000 crore of trade receivables were set off against purported gold imports that the ED views as possibly fictitious. Separately, the ED flagged the offsetting of approximately Rs 3,000 crore in trade receivables and payables against four to five overseas entities it considers to have questionable or “dubious” credentials.

Such set-offs can be legitimate commercial arrangements, but the agency’s focus, as reported, is whether the underlying transactions were genuine and whether documentation supports the movement of goods and payments.

African gold mine investments alleged to be unreflected in subsidiary accounts

Another reported line of investigation involves overseas investments. Officials alleged that the firm made investments exceeding Rs 1,000 crore in African gold mines, and that these do not appear in the accounts of any subsidiaries.

The allegation, as described, is not simply about the existence of overseas investment, but about whether disclosures and accounting treatment match what was allegedly undertaken. This point is likely to intersect with broader questions about the company’s consolidated reporting and subsidiary-level financial statements.

Sebi’s interim order and market restrictions

The ED action follows SEBI’s interim order dated June 3. In that order, SEBI alleged that Rajesh Exports inflated its consolidated revenues over five years by attributing large revenues to overseas subsidiaries, particularly Switzerland-based Valcambi SA, despite the subsidiary’s audited standalone financial statements showing only a fraction of those amounts.

As per reports, SEBI alleged suspected consolidated revenue inflation of up to Rs 1,515,000 crore (Rs 15.15 lakh crore) for fiscal years 2020-21 to 2024-25. Another report described the alleged inflation as more than Rs 1,500,000 crore (Rs 15 lakh crore) over five years.

SEBI restrained Rajesh Exports and Rajesh Mehta from accessing the securities market until the investigation concludes. It also restrained Rajesh Mehta from buying, selling, or dealing in securities of Rajesh Exports, directly or indirectly, until further orders.

What the company and promoter have said so far

Rajesh Exports has denied financial irregularities and said its reported revenues were correct. The company also suggested there may have been a communication gap between the regulator and the firm.

In one account, the company stated that while analysing transactions related to Valcambi, SEBI officials considered EBITDA numbers instead of revenue figures, which the company linked to the alleged gap. Separately, PTI reported that founder and Chairman Rajesh Mehta denied any fund diversion or wrongdoing, said the company would cooperate with the forensic audit ordered by SEBI, and would not challenge the interim order.

Key figures and dates at a glance

Market context and why the developments matter

The combined focus of SEBI and the ED puts attention on how a listed company’s overseas operations, subsidiary reporting, and trade-related accounting entries are recorded and disclosed. The allegations cited span consolidated revenue recognition, the use of overseas entities, and the linkage between receivables and purported imports.

In regional reporting, Rajesh Exports’ stock price was cited at Rs 107.49 on June 23, locked in a 5% upper circuit, after it had fallen to Rs 72.63 on June 15, described as a 52-week low. The price move highlights that investors are reacting to fast-changing regulatory developments, even as the core issues are still under investigation.

What to watch next

The ED searches were described as part of an ongoing FEMA probe, and SEBI’s restrictions remain in place until further orders and the conclusion of the investigation. Investors will track any further disclosures from Rajesh Exports on the searches, and any additional findings that agencies place on record.

The next concrete milestones, based on what has been reported, are the progress of SEBI’s forensic audit and any subsequent regulatory or enforcement steps that follow the ED’s examination of foreign exchange transactions and related documentation.