The Enforcement Directorate on Tuesday conducted searches at multiple premises linked to Rajesh Exports in Bengaluru, days after the Securities and Exchange Board of India (Sebi) passed an interim order against the company alleging serious irregularities in its financial reporting and fund flows, according to a Moneycontrol report.
The searches began early in the morning and covered multiple locations associated with the company and its promoters, the report added. Officials, however, have not confirmed the precise legal provisions under which the searches are being conducted.
What Sebi Found
In a 109-page interim ex-parte order, Sebi alleged that Rajesh Exports, its chairman Rajesh Mehta and several related entities created multiple layers of transactions that obscured the true movement of funds, making it difficult to identify the ultimate source and destination of money.
1 June 2026
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Sebi found that between April 2020 and September 2025, the company transferred ₹338.90 crore to Mehta's personal bank account and received ₹232.44 crore back. The regulator said Rajesh Exports failed to produce any loan agreements, board approvals or other documents to justify routing company funds through Mehta's personal account. 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 said.
One of the most important findings in the order was Sebi's allegation that the company misstated its financial statements to the extent of approximately ₹15.15 lakh crore through repeated recording of circular transactions. The regulator clarified that this figure represents the cumulative value of allegedly misstated accounting entries and not the amount of funds that actually changed hands. The same underlying transactions were repeatedly routed through multiple entities, resulting in a gross inflation of revenue and purchase figures, Sebi alleged.
The regulator also said 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.
