Shares of jewellery manufacturer Rajesh Exports Ltd extended their decline for a second consecutive session on Thursday, falling 5 per cent to hit a low of Rs 97.75. With the latest drop, the stock has declined 9.06 per cent over the past two trading days.

The continued selling pressure comes amid searches by the Enforcement Directorate (ED) at nine premises linked to the company in Bengaluru and Mumbai.

According to sources, the searches are related to trade receivables worth approximately Rs 3,000 crore that were allegedly adjusted against gold imports, the delivery of which is under scrutiny. Investigators are also examining allegations that trade receivables and payables were offset against transactions involving four to five foreign entities whose credentials are being questioned.

Sources further indicated that Rajesh Exports allegedly invested more than Rs 1,000 crore in gold mining operations in Africa, but the investments were not reflected in the books of account of any of its subsidiaries.

The latest developments come weeks after the Securities and Exchange Board of India (Sebi) issued an interim order concerning the company. The market regulator said it suspected misreporting involving approximately Rs 15.15 lakh crore in revenue over a five-year period, covering nearly the company's entire reported revenue during that timeframe.

Sebi also alleged that Rajesh Exports diverted company funds without obtaining the necessary approvals or making required disclosures.

In response to Sebi's observations, Rajesh Exports stated that the matter arose due to a "confusion and communication gap" and said it is in the process of addressing the issues raised by the regulator.

Sebi has barred Rajesh Exports and its promoter, Rajesh Mehta, from accessing the securities market until the completion of its investigation.

According to the regulator, around 97–99 per cent of the company's consolidated revenue was generated by its overseas subsidiaries, particularly Switzerland-based Valcambi SA. Sebi further alleged that Rajesh Exports failed to consistently disclose the financial statements of its subsidiaries in the public domain.