Investigation reveals FEMA contraventions including missing records for overseas transactions, Rs30 Bn in opaque trade set-offs, a 40% stock mismatch, and share-manipulation involving offshore benamidars.
FinTech BizNews Service
Mumbai, 25 June 2026: Directorate of Enforcement (ED) has conducted search and seizure operations under the Foreign Exchange Management Act (FEMA), 1999, at 9 premises located in Bengaluru and Mumbai. Searches commenced on 23.06.2026, in connection with an ongoing investigation into M/s Rajesh Exports Limited (REL) and connected persons for suspected contraventions of the provisions of FEMA, 1999.
Investigation has identified multiple issues, including, inter alia, the following:
(i) Non-availability of records of foreign transactions: REL failed to produce documentation in respect of its foreign transactions, including its imports, exports, overseas investments and the settlement of foreign trade receivables and payables, thereby rendering verification of the genuineness of such transactions almost impossible.
For example, contemporaneous records and documentation of claimed investment of Rs. 1035 Crore into African Mines were neither found nor provided by the company as yet.
(ii) Opaque netting / set-offs of large foreign trade receivables against foreign trade payables of around Rs. 3000 Crore: The Company is found to be engaged in setting off of trade payables and trade receivables from suspicious foreign parties based in the UAE and other overseas jurisdictions.
(iii) Stock discrepancy: Physical verification of stock carried out during the search revealed a difference of approximately 40% between the stock recorded in the factory registers and the actual physical stock found at the premises.
(iv) Disproportionate remuneration of key personnel: The company’s key business indicators showed significant departures from normal commercial practices. For example, 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 (MD) was paid only about Rs.17,000 per month, despite the company reporting consolidated revenue of approximately Rs. 7.7 Lakh Crore.
(v) Suspicious block trades and share-manipulation: The investigation has revealed suspicious block trades in the scrip of REL executed by certain individuals whose names also figure in the leaks released by the International Consortium of Investigative Journalists (ICIJ), indicating possible undisclosed offshore links, which are under examination.
For example, it was revealed that over Rs600 Crore were siphoned out of India through share-manipulation using NRI benamidars. During the course of the search action, various incriminating documents and digital evidences have been seized / recovered, which are being examined.
Further investigation is under progress.
