Indian authorities have uncovered a string of accounting and operational irregularities at Rajesh Exports, one of the country’s largest gold companies, according to an investigation released Wednesday — the latest blow for a firm already under intense regulatory scrutiny over its reported revenue.
The Bengaluru-based company, which owns Switzerland-based refining giant Valcambi through its subsidiary structure, reported consolidated revenue of more than 7.7 trillion rupees ($81 billion) last year, the Directorate of Enforcement (ED) said in a statement, adding that the company’s key business indicators showed significant departures from normal commercial practices. Among the starkest findings: the managing director was paid a monthly salary of just 17,000 rupees (around $180), while the chief financial officer had reportedly received no salary at all since 2020.
Search and seizure operations at the company’s offices in Bengaluru and Mumbai turned up insufficient documentation of foreign transactions, accounting discrepancies totalling 30 billion rupees, alleged stock manipulation, and a roughly 40 percent under-reporting of physical gold inventory, investigators said.
Ghana To Build One Of The World’s Largest Gold Refineries
The ED is reportedly also examining whether more than $20 million was funnelled abroad through suspected benami share transactions, and is probing potential violations of India’s Foreign Exchange Management Act. Shares of the company fell around 5 percent on Thursday before hitting the exchange-imposed lower trading limit, according to LSEG data.
The enforcement action follows a separate, far-reaching investigation by the Securities and Exchange Board of India (SEBI), which earlier this month issued a 109-page interim order alleging that between FY21 and FY25, roughly 97 to 99 percent of Rajesh Exports’ reported revenue — about 15.15 trillion rupees out of 15.45 trillion rupees in claimed consolidated revenue — could not be independently verified.
SEBI called the gap “egregious and unheard of.” The regulator’s order also flagged unexplained transactions worth hundreds of crores routed through entities linked to Chairman Rajesh Mehta without proper board or related-party disclosures, including flows to a lithium-ion battery firm co-founded by Mehta and his brother, as well as over 1,000 crore rupees in claimed African gold-mining investments that the company could not substantiate.
SEBI has since barred Mehta from participating in securities market activities pending further investigation.
Rajesh Exports has firmly rejected the allegations on both fronts, stating it “has never indulged in any mis-reporting” and that “all its filings, financial numbers including revenue is true and genuine.” The company has contested every finding raised in SEBI’s order.
Rajesh Exports is a major gold refiner and manufacturer of gold jewelry and related products, exporting from operations in Switzerland, India, and Dubai.
Credit: CNBC