The Enforcement Directorate on Tuesday conducted searches at multiple premises linked to Rajesh Exports Limited in Bengaluru, according to sources, marking a fresh development in the regulatory scrutiny surrounding the country's leading gold jewellery exporter.
Sources said the searches began early in the morning and were continuing at the time of filing this report. Multiple locations associated with the company and its promoters were being covered as part of the operation.
The searches come days after the Securities and Exchange Board of (SEBI) passed an interim order against Rajesh Exports, its chairman Rajesh Mehta, and several related entities, alleging serious irregularities in the company's financial reporting and fund flows.
In its order, SEBI alleged that the company had created multiple layers of transactions involving related entities that obscured the true nature of the movement of funds. According to the market regulator, these transactions were structured in a manner that made it difficult to identify the ultimate source and destination of the money, raising concerns over the transparency of the company's financial statements.
SEBI had found that Rajesh Exports failed to produce any loan agreements, board approvals or other documents to justify routing company funds through promoter Rajesh Mehta's personal bank account. The regulator said the company's own admission that funds were routed without revealing their original source pointed to prima facie intentional layering and concealment of fund trails. SEBI order said between April 2020 and September 2025, the company transferred Rs 338.90 crore to Mehta and received Rs 232.44 crore back.
One of the most significant findings in SEBI's interim order was its allegation that the company had misstated its financial statements to the extent of around Rs 15.15 lakh crore through repeated recording of circular transactions. The regulator alleged that the same underlying transactions were repeatedly routed through multiple entities, resulting in a gross inflation of revenue and purchase figures in the financial statements. SEBI clarified that the figure represented the cumulative value of allegedly misstated accounting entries and not the amount of funds that had actually changed hands.
The regulator also expressed concerns that such accounting practices may have misled investors regarding the company's scale of operations and financial health. Pending a detailed investigation, SEBI imposed interim restrictions on the company, its promoters, and certain associated entities.
The ED's searches are understood to be linked to the issues highlighted in SEBI's order. The financial crime investigation agency typically examines whether alleged violations disclosed by other regulators also point to possible offences under laws dealing with money laundering and proceeds of crime. However, officials have not confirmed the precise legal provisions under which the current searches are being conducted.
Rajesh Exports, one of India's largest gold exporters and jewellery manufacturers, has been under heightened regulatory scrutiny since SEBI issued its interim findings. The company has not publicly accepted the allegations and is expected to pursue legal remedies available under the securities law framework.
The ED action adds another layer of regulatory pressure on the company as investigations continue. With searches still underway, further details regarding the scope of the probe and any subsequent action are expected to emerge later in the day.
ED and Rajesh Exports could not be immediately contacted for their response.