Rajesh Exports shares hit the 5% lower circuit for the second consecutive session on Thursday, with the stock locked at its lower circuit limit of ₹97.02, down 4.99% at around 10 AM. According to Business Standard, the latest decline comes after a sharp seven-day rally during which the stock surged around 40%, with shares closing at the day's lower price band of ₹102.12 on Wednesday. The stock has tumbled 54% over six months and 9% in a month, with shares touching their 52-week low of ₹72.63 on June 15, 2026. The company's total market capitalisation stands at ₹3,015.19 crore as per NSE data, with both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) having sought clarification from the Bengaluru-based gold refining and jewellery manufacturing company following the ED's latest actions.
The Enforcement Directorate conducted fresh searches at multiple premises linked to Rajesh Exports and persons linked to it on Tuesday for suspected contravention of the Foreign Exchange Management Act (FEMA), as reported by Business Standard. According to the ED's official press release issued on June 24, search and seizure operations under the Foreign Exchange Management Act (FEMA), 1999, were carried out starting from June 23, 2026, as part of an ongoing investigation into suspected FEMA violations. The ED identified at least five issues against the firm and recovered various incriminating documents and digital devices during the searches. The agency has officially confirmed Zee Business's earlier reports on the searches, flagging multiple serious irregularities during their investigation, including a 40% stock discrepancy where physical verification revealed actual gold stock at premises was substantially lower than recorded quantities in factory registers and company books. The latest ED action comes after the agency said the gold refiner and jewellery exporter had deviated from standard commercial practices and was unable to furnish key documents linked to imports, exports, overseas investments and foreign trade settlements. The absence of supporting records had hampered the agency's ability to verify the authenticity of several cross-border transactions.
The Ministry of Corporate Affairs has ordered an SFIO investigation into Rajesh Exports, with the probe expected to examine allegations of financial irregularities flagged by market regulator SEBI. As per The Economic Times, citing people familiar with the matter, the SFIO investigation will be launched under Section 212 of the Companies Act, 2013, based on reports from the Registrar of Companies or in the public interest. The SFIO, which investigates complex corporate fraud cases, can be directed to probe a company under this section. This development follows SEBI's interim order dated June 3, in which the regulator alleged that Rajesh Exports had inflated its consolidated revenue over a five-year period by attributing substantial revenue to overseas subsidiaries, particularly Switzerland-based Valcambi SA, despite the subsidiary's audited standalone financial statements showing significantly lower figures.
The latest ED action follows a significant accounting investigation by SEBI, which allegedly found that Rajesh Exports inflated its consolidated revenue by ₹15.15 lakh crore between FY21 and FY25, primarily through its Swiss refining unit, Valcambi. As per The Hindu BusinessLine, the searches were carried out across nine locations following the SEBI investigation, with the agency claiming the company failed to maintain critical transaction records and could not substantiate several overseas investments and trade settlements. This represents a substantial revision from earlier estimates, with the ₹15.15 lakh crore inflation figure significantly higher than previous allegations. The probe is also examining alleged capital markets fraud, adding to the multiple regulatory challenges facing the company. Apart from examining possible FEMA violations, the investigation is also looking into alleged irregularities related to the capital markets.
The ED has uncovered unusual remuneration patterns in Rajesh Exports' senior management compensation structure, claiming that the company's key business indicators showed significant departures from normal commercial practices. According to the agency, the remuneration paid to senior management was unusually low compared to the scale of the company's operations. The chief financial officer (CFO) has not received any salary since 2020, while the managing director was paid only about ₹17,000 per month, despite the company reporting consolidated revenue of approximately ₹7.7 lakh crore. This compensation structure has raised questions about the company's financial transparency and governance practices, particularly given the scale of operations and the apparent disconnect between revenue generation and executive compensation. During the search, ED seized various incriminating documents and digital evidence which are being further examined.
Rajesh Exports Founder and Chairman Rajesh Mehta recently denied any fund diversion or wrongdoing during an interview with Press Trust of India (PTI). He said that the company will fully cooperate with the fresh forensic audit ordered by the SEBI and not challenge the market regulator's interim order against it. Regarding the latest ED findings, Mehta stated that "If anybody wants to inflate, they will inflate their bottom line. They will inflate their profit to get some benefits. If they have alleged or observed an inflation of top line, which is absolutely no use for anybody." The company has not yet issued a formal response to the ED action, with officials awaiting a response from the company. BSE has also sought clarification from the company in connection with ED searches in Bengaluru after the SEBI order flags alleged financial misstatements, as reported by Business Standard. This stance represents a significant shift from previous denials, as the company now appears willing to engage with regulatory authorities and cooperate with ongoing investigations.
