New Delhi, June 24 (IANS) Directorate of Enforcement (ED) has conducted search and seizure operations at nine premises of Rajesh Exports Limited (REL), located in Bengaluru and Mumbai, in connection with an ongoing investigation into the company and connected persons for suspected contraventions of provisions of the Foreign Exchange Management Act (FEMA), according to an official statement issued on Wednesday.

Investigation has identified multiple issues, which include non-availability of records of foreign transactions. Rajesh Exports Ltd 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 1,035 crore into African Mines were neither found nor provided by the company as yet.

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 in which the amount involved is around Rs 3,000 crore, according to ED.

Physical verification of stock carried out during the search revealed a difference of approximately 40 per cent between the stock recorded in the factory registers and the actual physical stock found at the premises.

The company’s key business indicators also 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, said the ED.

The investigation has also revealed suspicious block trades in the scrip of Rajesh Exports executed by certain persons 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 Rs. 600 crore were siphoned out of India through share-manipulation using "NRI benamidars".

During the course of the search action, which began on Tuesday, various incriminating documents and digital evidence have been seized which are being examined. Further investigation in the case is still under progress, the statement added.

--IANS

sps/na