Big action after SEBI’s allegations! ED raids many locations of Rajesh Exports, creates panic

ED Raids On Rajesh Exports: India’s famous jewelery and gold export company Rajesh Exports is in the news these days. The Enforcement Directorate (ED) team conducted raids at several locations in Bengaluru on Tuesday against the company and its promoters Rajesh Mehta. The investigating agency has taken this action at a time when just a few days ago, market regulator SEBI had raised serious questions regarding the financial transactions and accounting of the company.

According to media reports, the Enforcement Directorate team raided the premises of Rajesh Exports and people associated with it. ED is thoroughly investigating the documents related to the company’s financial records, banking transactions and fund flows. However, the investigating agency has not yet given any official statement regarding this action. It is being said that this raid is being conducted on the basis of information revealed in the recent report of SEBI.

What did SEBI say in its interim order?

Let us tell you that market regulator SEBI, in its internal order, had accused the company and its chief Rajesh Mehta and some other institutions associated with them of financial irregularities. SEBI, in its interim order, has said that the company carried out complex transactions through multiple related entities, making it difficult to trace the actual source and receiver of the money. The structure of these transactions was such that a deliberate attempt was made to hide the fund trail.

SEBI has also accused Rajesh Exports of not presenting any necessary documents such as loan agreement, board approval and other records to prove its claims. The report also said that between April 2020 and September 2025, the company transferred approximately Rs 338.90 crore to promoter Rajesh Mehta, while it received only Rs 232.44 crore back.

What is the Rajesh Exports controversy?

Let us tell you that this whole matter started in March 2024 with the complaint of a shareholder, who expressed concern over the huge ‘trade receivables’ (i.e. money outstanding from customers) pending for years in the company’s accounting. Subsequently, SEBI initiated forensic audit and formal investigation for the period between financial years 2020-21 to 2024-25 (5 years). The things that came to light in this investigation are extremely shocking.

1. Fake revenue of Rs 15.15 lakh crore: SEBI alleges that Rajesh Exports has overstated or misrepresented approximately 97 percent to 99.8 percent of its total consolidated revenues in the last 5 years.

2. Game of Overseas Subsidiaries: The company revealed that more than 98 percent of its revenue is coming from foreign companies outside India (such as Singapore and Switzerland). According to the market regulator, when documentary evidence of the transactions of these foreign subsidiaries was sought, the company could not show any concrete records or invoices.

3. Personal trading shown as company business: SEBI found that promoter Rajesh Mehta was trading in gold derivatives from his personal account through a broking firm (Affluence Shares & Stocks). He recorded his personal losses/profits and transactions in the corporate accounts of Rajesh Exports as ‘Sale and Purchase’ of the company as sale of Rs 11,487 crore and purchase of Rs 11,488 crore.

4. Misappropriation of funds: Without the approval of the board or audit committee, Rs 339 crore was transferred from the company’s accounts to the private account of promoter Rajesh Mehta, out of which only Rs 232 crore was returned.

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Why did SEBI take action against the company?

Kamlesh Chandra Varshney, whole-time member of the Security and Exchange Board of India, in his 109-page order has termed this irregularity as extraordinary and unheard of. SEBI has taken these immediate steps to protect the interests of investors and maintain market regulation.