An Indian investigative agency has alleged that Rajesh Exports, a major gold company, engaged in multiple financial and operational violations and underreported its gold inventory.
The company disclosed consolidated revenue of nearly $81 billion, yet its Managing Director's monthly salary is only about $180.
Rajesh Exports has denied any financial misrepresentation. Its stock price hit the lower circuit limit for the day.
Indian authorities released investigation results this Wednesday, revealing that Rajesh Exports, one of the country's leading gold firms, was found to have multiple financial and operational compliance issues. This follows several weeks after market regulators first raised questions about the company's reported revenue.
The Enforcement Directorate stated in a release that this Bangalore-based company also holds a controlling stake in Valcambi, a major Swiss gold refinery. The company reported consolidated revenue exceeding 7.7 trillion Indian Rupees (approximately $81 billion) last year.
The agency disclosed that the company's Managing Director receives a monthly salary of just 17,000 rupees (around $180), and the Chief Financial Officer has not drawn a salary since 2020.
The Enforcement Directorate stated that several of the company's key operational metrics "drastically deviate from normal business practices."
Data from the London Stock Exchange Group shows the company's stock fell nearly 5% at Thursday's open, subsequently triggering the exchange's intraday lower circuit limit.
The investigation revealed that after searches and seizures at the company's offices in Bangalore and Mumbai, authorities found incomplete documentation for overseas transactions, an accounting discrepancy of 30 billion rupees, suspected stock price manipulation, and an underreporting of physical gold inventory by approximately 40%.
Earlier this month, in a separate investigation, the Securities and Exchange Board of India found that 97% to 99% of the company's revenue may have been inflated. The regulator described the scale of the discrepancy as "extremely serious and unprecedented" and issued a notice seeking an explanation from the company.
In response, Rajesh Exports stated: "The company has never done any financial misrepresentation and all our filings, including revenue, are true and correct."
Rajesh Exports is primarily engaged in gold refining and manufactures various gold products, exporting gold jewelry and items from Switzerland, India, and Dubai.
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