A non-bailable arrest warrant has been issued by a Kerala court against Prashant J Mehta, Managing Director of Rajesh Exports in connection with a case registered against him for allegedly selling gold jewellery meant to be exported, in the domestic market.
Directorate of Revenue Intelligence, which is investigating the case, had approached the Additional Chief Judicial Magistrate court, which issued the arrest warrant against Mehta, who is absconding. Despite summons, Mehta had not appeared before the DRI.
The case against the listed gold exporting and retail company in Bangalore, which has a unit at the Cochin Export Processing Zone in nearby Kakkanad, is that it had allegedly diverted the imported gold as jewellery to the domestic market.
The company had come under the DRI scanner in May this year when the DRI officials seized about one kg of gold from Hareesh Babu, a company official. The official was later arrested. However, Rajesh Mehta, Chairman of the Bangalore-based company said that Babu was an ex-employee of the company.
"There seems to be some confusion in the matter. We are also trying to understand what happened. We haven't received any copy from the Court and we have no information on this till now," Mehta told Business Standard in response to Tuesday's arrest warrant against Prashant Mehta.
According to DRI's public prosecutor, Rajesh Exports is alleged to have indulged in this activity for three years and as much as Rs 90 crore of tax was evaded.
Rajesh Exports, which recorded net sales of Rs 5503.2 crore in Q1, is better known for its retail initiative Shubh Jewellers that has been seeing better profits. However, its retail initiative launched in mid 2010 contributes to about 10 per cent of the company's profit.
The RBI has mandated that 20 per cent of all gold imported has to be exported out of the country as the government attempts to boost exports to narrow the Current Account Deficit in the country.