SEBI Flags ₹15 Lakh Crore Revenue Misstatement at Rajesh Exports; Promoter Barred

The Securities and Exchange Board of India (SEBI), India's market regulator, has initiated a significant enforcement action against Rajesh Exports Limited (REL), a prominent Bengaluru-based gold refiner and jewellery manufacturer, and its Chairman and Managing Director, Rajesh Mehta. An interim ex-parte order issued by SEBI on June 3, 2026, alleges a massive revenue misstatement amounting to approximately ₹15.15 lakh crore (or ₹15.15 trillion) between the financial years 2020-21 and 2024-25. This staggering figure represents nearly 97-99% of the company's consolidated revenue during this period, primarily attributed to its overseas subsidiaries and step-down subsidiaries. The investigation, which commenced following a shareholder complaint in March 2024 concerning large outstanding trade receivables, unveiled a complex web of alleged financial irregularities. SEBI appointed an investigating authority in October 2024 and subsequently engaged BDO India Services Pvt Ltd as a forensic auditor in December 2024 to examine Rajesh Exports' accounts. Central to SEBI's findings is the role of the company's international operations, particularly its Swiss-based subsidiary, Valcambi SA, which Rajesh Exports had previously described as its principal operating entity. Despite being presented as the main driver of the group's consolidated revenue, Valcambi SA's standalone audited financial statements reportedly showed minimal revenues, creating a stark mismatch with the figures reported by Rajesh Exports and its holding subsidiary, Global Gold Refineries AG (GGR). SEBI highlighted that between 97% and 99% of Rajesh Exports' consolidated revenues during the period under scrutiny originated from these overseas subsidiaries. The regulator has also alleged a severe lack of cooperation from Rajesh Exports and Rajesh Mehta during the investigation. SEBI noted that the company repeatedly failed to provide access to crucial accounting systems (ERP), complete books of accounts, key accounting records, and detailed customer, vendor, inventory, and debtor information related to its overseas operations. Rajesh Exports attempted to justify the non-disclosure by citing Swiss data protection laws and confidentiality obligations; however, SEBI explicitly rejected this argument, stating that such provisions apply to personal data and cannot override disclosure requirements under Indian securities laws. Further allegations include non-genuine transactions. SEBI's order points to alleged fictitious gold transactions totaling around ₹11,487 crore to ₹11,488 crore with Affluence Shares and Stocks Pvt Ltd between FY22 and FY24. These transactions purportedly accounted for about two-thirds of Rajesh Exports' standalone sales and purchases. However, Affluence Shares and Stocks Pvt Ltd reportedly denied ever executing such bulk gold trades with Rajesh Exports, stating it only dealt with Rajesh Mehta in his personal capacity. Moreover, SEBI has flagged the alleged diversion of corporate funds. The regulator's findings indicate that Rajesh Exports routed approximately ₹339 crore from corporate accounts to Rajesh Mehta's personal accounts. These funds were allegedly utilized by Mehta for personal gold derivative trades via Affluence, incurring losses, with the remaining balances returned to REL. The company then improperly recorded these personal trading volumes as corporate bulk gold sales to artificially inflate its business turnover. Such transfers lacked necessary board and audit committee approvals, as well as proper disclosures. In response to these prima facie findings, SEBI has imposed interim measures, including barring Rajesh Mehta from buying, selling, or dealing in the securities of Rajesh Exports or any other listed entity until further orders. The company has also been directed to cooperate fully with the ongoing investigation and submit all pending information within 30 days. The revelations have had an immediate impact on the market. Rajesh Exports' shares hit a 5% lower circuit on the day the news broke. The stock has delivered negative returns for five consecutive years and has plummeted almost 90% from its all-time high in February 2023, reflecting long-standing investor concerns and escalating regulatory scrutiny. Of significant concern is the exposure of institutional investors, notably Life Insurance Corporation of India (LIC), which holds a substantial 10.80% equity stake in Rajesh Exports. Following the SEBI order, LIC shares also experienced a decline of over 1%, highlighting the ripple effect on public sector institutions. Canara Bank, a lender to Rajesh Exports, has also come under scrutiny, having classified its exposure to the company as a stressed asset after repayment defaults. Rajesh Mehta, however, has vehemently denied the allegations, stating that the interim order contains nothing true and that the company is in the process of studying it to prepare a comprehensive response. The investigation is ongoing, and a final order from SEBI could lead to more severe penalties, including monetary fines, disgorgement of ill-gotten gains, and extended market access restrictions. This case underscores SEBI's commitment to ensuring market integrity and protecting investor interests in India. It serves as a stark reminder for listed entities regarding their disclosure obligations and the consequences of alleged financial misrepresentation.

Frequently Asked Questions

Read Full Story on Quick Digest