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A day after recording good sales of gold jewellery on the occasion of Akshaya Tritiya, Rajesh Exports, the publicly held gold jewellery exporter and retailer, has come under the scanner of the Directorate of Revenue Intelligence (DRI) for allegedly routing gold meant for exports into the Indian retail market.
DRI’s Cochin office is framing charges against the company, under Section 135 of the Customs Act. If proven guilty, the company would have to cough up double the tax evaded and the prime accused would be sentenced to three years in prison.
C B Udaybhanu, special public prosecutor for DRI, said, “A senior executive of Rajesh Exports, working at a special economic zone of Rajesh Exports in Cochin, was caught with 900 g of gold at the Cochin Railway Station. He was taking that gold to the retail market in Bangalore. He has been arrested, and after an investigation, we have come to know this activity has been going on for three years; as much as Rs 90 crore of tax has been evaded.”
When contacted, Rajesh Mehta, chairman and managing director, Rajesh Exports said an ex-employee of his organisation had been arrested. “He stole the gold from the unit and was acting on his own. We haven’t routed gold meant for exports into the retail market. We have provided all the information DRI had sought and have not evaded any taxes,” he added.
To boost its net margin, Rajesh Exports has been strengthening its retail presence in India in the past two years. In 2011-12, the company earned about Rs 407 crore on sales of Rs 25,740 crore, working on a margin of 1.58 per cent. Early today, Mehta told Bloomberg the first quarter of 2013-14 was turning out to be better than the year-ago period, in terms of retail sales.
On Tuesday, shares of Rajesh Exports fell 3.3 per cent to close at Rs 121.55 a share on the National Stock Exchange.
