Rajesh Exports Faces Scrutiny Over Financial Irregularities Amidst Salary Concerns

Financial Discrepancies at Rajesh Exports

The Chief Financial Officer (CFO) of Rajesh Exports, a company currently facing financial turmoil, has not received any salary since 2020. Meanwhile, the Managing Director (MD) has been earning a mere Rs 17,000 per month, despite the firm reporting a consolidated revenue of around Rs. 7.7 Lakh Crore, according to a statement from the Enforcement Directorate (ED) following recent searches at the company's premises.

The ED conducted searches at nine locations in Bengaluru and Mumbai linked to Rajesh Exports after the Securities and Exchange Board of India (SEBI) issued an interim order against the company and its promoter, Rajesh Mehta. The investigation revealed a lack of documentation regarding foreign transactions, raising concerns about the company's financial practices.

One significant finding highlighted by the ED was the unusually low remuneration for senior management, which deviated from standard commercial practices. The CFO's lack of salary since 2020 and the MD's minimal pay were particularly alarming given the company's scale of operations.

Additionally, the company failed to provide necessary documentation for its foreign transactions, including imports, exports, and overseas investments, making it challenging to verify the authenticity of these dealings. For instance, the claimed investment of Rs 1035 Crore in African Mines lacked supporting records.

The ED also identified suspicious netting of foreign trade receivables and payables, amounting to around Rs 3000 Crore, involving dubious foreign entities based in the UAE and other regions. Furthermore, discrepancies in stock levels were noted, with a physical verification revealing a 40% difference between recorded and actual stock.

Moreover, the investigation uncovered questionable block trades in the shares of Rajesh Exports, linked to individuals associated with offshore accounts, as revealed by the International Consortium of Investigative Journalists (ICIJ). It was discovered that over Rs. 600 Crore may have been illicitly transferred out of India through share manipulation involving NRI benamidars. During the searches, various incriminating documents and digital evidence were seized and are currently under review.