SEBI Accuses Rajesh Exports of ₹15 Lakh Cr Revenue Inflation; Chairman Denies

The Securities and Exchange Board of India (SEBI) has launched a significant interim ex-parte order against Rajesh Exports Ltd (REL), a prominent Bengaluru-based gold refiner and jewellery manufacturer, and its Chairman and Managing Director, Rajesh Mehta. The order, issued on June 3, 2026, outlines severe allegations of financial irregularities and misrepresentation, with a staggering figure of approximately ₹15.15 lakh crore in consolidated revenues being allegedly inflated between the financial years 2020-21 and 2024-25. This amount, according to SEBI, represents nearly 99.8% of the company's total reported consolidated revenue during the stated period. SEBI's 109-page interim order details several alarming findings from its investigation and a forensic examination. The market regulator found prima facie evidence suggesting that 97-99% of Rajesh Exports' reported revenue may have been inflated, describing these aberrations as "egregious and unheard of." The allegations extend beyond mere revenue inflation to include questionable transactions with third parties, improper accounting practices, and the routing of company funds through promoter-linked entities. A key focus of SEBI's concern is the substantial portion of Rajesh Exports' consolidated revenue, which, between FY21 and FY25, was attributed to overseas subsidiaries, particularly Switzerland-based Valcambi SA. However, the regulator noted that the audited standalone financial statements of Valcambi SA reflected negligible revenues, raising serious doubts about the authenticity of the group-level consolidated figures. Furthermore, SEBI has accused Rajesh Exports and its CMD, Rajesh Mehta, of a lack of cooperation during the ongoing investigation. The regulator stated that the company failed to provide access to crucial accounting systems, withheld important financial records, and did not furnish complete documentation sought by investigators and forensic auditors. This alleged non-cooperation significantly hampered the ability of the forensic auditor to verify a large portion of the company's transactions, as supporting records were often incomplete or unavailable. In response to these grave findings, SEBI has taken immediate regulatory action. Rajesh Mehta has been barred from buying, selling, or otherwise dealing in the securities of Rajesh Exports until further orders. The regulator has also directed Rajesh Exports to extend full cooperation to investigators, ensure true and fair disclosure of its financial statements and related-party transactions, and has ordered a fresh forensic audit of the company's books of accounts. The initial investigation was triggered by a shareholder complaint received in March 2024, which flagged concerns over large outstanding trade receivables in the company's books. Despite the severity of SEBI's interim order, Rajesh Mehta has strongly refuted the allegations. In statements to various media outlets, including Moneycontrol, NDTV Profit, IANS, and Free Press Journal, Mehta asserted that "nothing in it is true" and that the findings presented by SEBI are "not accurate." He indicated that the company is currently reviewing the extensive order and will prepare a detailed response to address each of SEBI's concerns. The news has had an immediate and significant impact on the stock market. Shares of Rajesh Exports plummeted, hitting a 5% lower circuit on June 4, 2026, reflecting heightened investor uncertainty and panic selling following the SEBI order. The situation is of particular interest to a broad spectrum of investors, including large institutional entities. Life Insurance Corporation of India (LIC), the country's largest insurer, held a 10.80% stake in Rajesh Exports as of the March 2026 quarter. Additionally, Foreign Institutional Investors (FIIs) collectively held approximately 14.3% of the company's shares as of March 2026, though their ownership has seen a reduction over the past three years. The alleged financial misrepresentation, if proven, could lead to a substantial erosion of public investor wealth, with initial estimates by SEBI pointing to approximately ₹12,725.53 crore from the peak market capitalization. The regulatory action and its implications for corporate governance and investor protection make this a critical development in the Indian financial landscape.

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