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The Enforcement Directorate (ED) on Tuesday conducted searches at premises linked to Rajesh Exports Ltd as the company faces scrutiny from market regulator Sebi over alleged financial irregularities.
According to official sources, the searches were carried out under the Foreign Exchange Management Act (FEMA) at locations in Bengaluru and Mumbai associated with the company.
The action comes days after the Securities and Exchange Board of India (Sebi) issued an interim order alleging that Rajesh Exports overstated its consolidated revenues by more than ₹15 lakh crore over a five-year period.
In its order, Sebi said the company attributed massive revenues to its overseas subsidiaries, particularly Switzerland-based Valcambi SA, even though the subsidiary's audited standalone financial statements reflected only a fraction of those amounts.
The regulator alleged that the discrepancy may have led to a significant overstatement of the group's reported financial performance and raised concerns about the accuracy of disclosures made to investors.
As part of its interim directions, Sebi barred Rajesh Exports Chairman and Managing Director Rajesh Mehta from buying, selling or otherwise dealing in the company's securities, directly or indirectly, until further orders.
Rajesh Exports has denied any wrongdoing. The company has maintained that its reported revenues are accurate and has said there appears to be a communication gap between the regulator and the company regarding the accounting treatment of its overseas operations.
The latest ED action adds another layer of scrutiny for the Bengaluru-headquartered gold exporter, one of India's largest players in the precious metals sector. The outcome of the investigations by Sebi and the ED could have significant implications for the company and its management.
According to official sources, the searches were carried out under the Foreign Exchange Management Act (FEMA) at locations in Bengaluru and Mumbai associated with the company.
The action comes days after the Securities and Exchange Board of India (Sebi) issued an interim order alleging that Rajesh Exports overstated its consolidated revenues by more than ₹15 lakh crore over a five-year period.
In its order, Sebi said the company attributed massive revenues to its overseas subsidiaries, particularly Switzerland-based Valcambi SA, even though the subsidiary's audited standalone financial statements reflected only a fraction of those amounts.
The regulator alleged that the discrepancy may have led to a significant overstatement of the group's reported financial performance and raised concerns about the accuracy of disclosures made to investors.
As part of its interim directions, Sebi barred Rajesh Exports Chairman and Managing Director Rajesh Mehta from buying, selling or otherwise dealing in the company's securities, directly or indirectly, until further orders.
Rajesh Exports has denied any wrongdoing. The company has maintained that its reported revenues are accurate and has said there appears to be a communication gap between the regulator and the company regarding the accounting treatment of its overseas operations.
The latest ED action adds another layer of scrutiny for the Bengaluru-headquartered gold exporter, one of India's largest players in the precious metals sector. The outcome of the investigations by Sebi and the ED could have significant implications for the company and its management.
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