Indian authorities have launched an investigation into Rajesh Exports, one of the country's largest gold exporters, uncovering multiple accounting and operational irregularities, including under-reported gold inventory and insufficient records of foreign transactions [1]. The Directorate of Enforcement revealed that the Bengaluru-based company, which owns Switzerland's major gold refiner Valcambi, reported consolidated revenue of more than 7.7 trillion rupees ($81 billion) last year [1]. Notably, the managing director was paid a monthly salary of just 17,000 rupees (approximately $180), while the chief financial officer had not received a salary since 2020, raising concerns about the company's governance and financial practices [1].
Search and seizure operations at Rajesh Exports' offices in Bengaluru and Mumbai uncovered accounting discrepancies totaling 30 billion rupees, alleged stock manipulation, and an under-reporting of physical gold inventory by around 40% [1]. The Directorate of Enforcement stated, "The company's key business indicators showed significant departures from normal commercial practices" [1].
Earlier in June, the Securities and Exchange Board of India (SEBI) conducted a separate investigation, finding that 97% to 99% of Rajesh Exports' reported revenues appeared inflated. SEBI described the revenue gap as "egregious and unheard of" and issued a notice seeking an explanation from the company [1]. In response, Rajesh Exports asserted that it "has never indulged in any mis-reporting and all its filings, financial numbers including revenue is true and genuine" [1].
Following the revelations, shares of Rajesh Exports dropped around 5% on Thursday before hitting the exchange-imposed lower trading limit, indicating a strong negative market reaction [1]. CNBC has reached out to Rajesh Exports and Valcambi for comment and is awaiting a response [1].
CONCLUSION
The investigation into Rajesh Exports has exposed significant accounting discrepancies and alleged revenue inflation, prompting a sharp decline in the company's share price. Regulatory scrutiny and ongoing probes signal heightened risk and uncertainty for stakeholders. The market's reaction underscores concerns about transparency and governance at one of India's largest gold exporters.