Weeks after the SEBI findings of an inflated invoice of more than Rs 15 lakh crore, the Enforcement Directorate (ED) on Tuesday conducted searches against Rajesh Exports. The case is registered under FEMA (Foreign Exchange Management Act) after finding a huge foreign fund inflow and outflow to Rajesh Exports’ linked firms operating in foreign countries.
The ED raids are happening at Bengaluru and Mumbai, said officials. Rajesh Exports Ltd allegedly inflated its consolidated revenues by more than Rs 15 lakh crore over five years by attributing massive revenues to overseas subsidiaries, particularly Switzerland-based Valcambi SA, despite the subsidiary’s audited standalone financial statements showing only a fraction of those amounts, according to an interim order by SEBI.
According to investigators, Rajesh Mehta headed firm had siphoned the majority of the funds from India to Switzerland-based Valcambi SA, a gold refinery unit. This refinery is believed to be owned by Rajesh Mehta.
The regulator has restrained the company’s Chairman and Managing Director, Rajesh Mehta, from buying, selling or dealing in securities of Rajesh Exports, either directly or indirectly, until further orders. As per a detailed analysis of the TransUnion CIBIL data filed by Canara Bank, Rajesh Exports owes a total of Rs 2,458 crore, and the loan amount is split into six entries of Rs 409 crore each. Canara Bank is now conducting recovery suits at the Debt Recovery Tribunal (DRT) in Chennai, and three directors of the company are shows as personal guarantors to these loans. The directors shown as personal guarantors are Rajesh Mehta and his partners, Prashant Mehta and S Paramasivan.
Rajesh Exports has also filed a counter case in DRT against the bank, seeking loss of more than Rs 20,456 crore. However, DRT in 2023 dismissed the company’s claim, citing that they produced fake bills. The 2023 order observes that Rajesh Exports diverted funds from Canara Bank through its subsidiary gold refinery, Valcambi SA in Switzerland.
