ED raids Rajesh Exports after SEBI flags alleged ₹15.15 lakh crore revenue misrepresentation

The Enforcement Directorate (ED) on Monday launched search operations against Rajesh Exports Limited (REL), intensifying scrutiny of the Bengaluru-based gold and jewellery company days after market regulator SEBI alleged large-scale financial irregularities and corporate governance failures.

According to sources, ED teams are conducting raids at multiple locations in Bengaluru and Mumbai. The searches began in the morning and were continuing at the time of reporting. Officials have not yet disclosed the exact scope of the operation, and further details are awaited.

The latest action comes shortly after the Securities and Exchange Board of India (SEBI) passed an interim ex-parte order against Rajesh Exports and its Chairman and Managing Director, Rajesh Mehta.

In its 109-page order, SEBI alleged that the company had misrepresented consolidated revenues worth approximately ₹15.15 lakh crore between FY2020-21 and FY2024-25, accounting for nearly 99.8% of its reported consolidated revenue during the period.

The regulator said its preliminary investigation revealed evidence of non-genuine transactions, improper accounting practices, alleged diversion of company funds through promoter-linked entities, inadequate disclosures, and failures in corporate governance.

SEBI further alleged that Rajesh Exports manipulated financial statements through unverifiable transactions, incorrect consolidation of accounts, unexplained investments, and non-disclosure of related-party dealings, creating what it described as a misleading picture of the company's financial position and operational scale.

The regulator also questioned the company's disclosures regarding investments in African gold mines, stating that it was unable to independently verify the claimed investments. Additionally, SEBI raised concerns over the routing of company funds through the personal bank accounts of Rajesh Mehta and Siddharth Mehta without appropriate approvals or disclosures.

The ED's search operations are understood to be linked to the broader investigations into these alleged financial irregularities. While no official statement has yet been issued by the agency, the raids mark a significant escalation in the scrutiny surrounding one of India's largest gold exporters.

Further updates are expected once the search operations conclude and authorities release additional details.