How Sebi Traced The Alleged Rs 15.15 Lakh Crore Reporting Gap At Rajesh Exports

The Securities and Exchange Board of India (Sebi) has accused Rajesh Exports Ltd (REL) of prima facie misrepresenting nearly Rs 15.15 lakh crore of revenue reported through its overseas subsidiaries between FY21 and FY25. Following its preliminary findings, the regulator has barred promoter and executive chairman Rajesh Mehta from dealing in the company's securities until further orders.

In a 109-page interim order issued on June 3, Sebi said the Bengaluru-based gold refiner and jewellery exporter presented a misleading picture of its consolidated financial position by relying on revenue figures that could not be independently verified despite repeated requests for records, customer details, invoices and supporting documentation.

According to Sebi, most of Rajesh Exports' revenue was generated by its overseas units, particularly Swiss entities Global Gold Refineries AG (GGR) and Valcambi SA. The regulator noted that almost all of the group's consolidated revenue originated from subsidiaries and step-down subsidiaries, which accounted for 97-99 per cent of reported turnover during the period under review.

According to the regulator, Rajesh Exports reported consolidated revenue of about Rs 15.45 lakh crore between FY21 and FY25. After comparing those disclosures with audited standalone financial statements of Valcambi SA, Sebi concluded that revenue attributed to subsidiaries may have been overstated by about Rs 15.15 lakh crore, or 99.80 per cent of the amount attributed to those entities.

Sebi's analysis showed that Valcambi's audited standalone revenue ranged from roughly Rs 427 crore to Rs 743 crore annually, while GGR and Rajesh Exports reported revenues running into several lakh crore rupees. The regulator said the company failed to provide documentary evidence, accounting opinions, ownership records, reconciliation statements or transaction-level data to justify the difference.

Rajesh Exports argued that Valcambi's standalone accounts recognised only processing income and value addition, while GGR recognised the gross value of gold transactions. Sebi said the explanation remained unsupported by verifiable records.

The order also cites concerns over standalone accounts. Sebi said Rajesh Exports recorded sales of Rs 11,487 crore and purchases of Rs 11,488 crore with Affluence Shares and Stocks Pvt Ltd between FY22 and FY24, representing roughly two-thirds of its standalone sales and purchases during the period. Affluence later informed Sebi that Rajesh Exports was never its client and that it had dealt only with Rajesh Mehta in his personal capacity.

Investigators found that trades executed by Mehta through his personal account with Affluence appeared to have been recorded in Rajesh Exports's books as company transactions. Sebi said this may have inflated the company's standalone sales and purchase figures.

The regulator also questioned fund movements between the company and its promoter. Bank records examined by Sebi showed transfers of Rs 338.90 crore from Rajesh Exports to Mehta between April 2020 and September 2025, against Rs 232.44 crore transferred back to the company. Sebi said several transactions lacked clear commercial rationale, approvals or disclosures.

Apart from alleged financial misstatements, Sebi accused the company of failing to cooperate with investigators and forensic auditors. The regulator said Rajesh Exports did not provide access to key accounting systems, books of accounts and transaction records, limiting the ability of auditors to verify large portions of reported business activity.

The order names Rajesh Exports and Rajesh Mehta as noticees. Sebi said Mehta exercised substantial control over the group's operations and financial affairs, including overseas subsidiaries and transactions routed through personal accounts.

The regulator has ordered a fresh forensic examination and directed the company to provide information sought during the investigation. It has also restrained Mehta from buying, selling or otherwise dealing in Rajesh Exports securities until further orders. The findings remain preliminary and the company will have an opportunity to present its defence.

How A Shareholder Complaint Led Sebi To The Rs 15.15 Lakh Crore Mismatch

The investigation started on March 11, 2024, after Sebi received a complaint from a shareholder who raised questions about large unpaid dues shown in Rajesh Exports' books. The complaint prompted the regulator to take a closer look at the company's financial statements and disclosures.

To investigate the matter, Sebi appointed an investigating authority in October 2024 and later brought in BDO India Services as a forensic auditor. Over the following months, the regulator sought sales records, invoices, bank statements, subsidiary accounts and other documents to verify the company's reported revenues.

As it examined the records, Sebi compared the financial statements of Rajesh Exports and its overseas subsidiaries, particularly Swiss entities GGR and Valcambi SA. The regulator found major differences between the revenues reported by Valcambi and the much larger figures shown in the group's consolidated accounts, raising questions about the accuracy of the disclosures.

The probe took another turn in September and October 2025 when Affluence told Sebi that Rajesh Exports was never its client and that it had dealt only with promoter-chairman Rajesh Mehta in his personal capacity. Sebi checked the claim against GST records, banking data and other documents and said it found no evidence of direct transactions between Rajesh Exports and Affluence.

The forensic audit report, submitted in March 2026, highlighted several limitations because some records were not made available to the auditor. Based on the documents it reviewed, Sebi observed there were serious concerns about the company's financial disclosures and the scale of its reported operations.

Rajesh Export Shares Locked In At 5% Lower Circuit

After Sebi's order became public, Rajesh Exports shares hit the lower circuit. The stock closed at Rs 103.92 apiece on the NSE on June 4, 2026, down 5 per cent from previous close.

The findings are significant because the revenues questioned by Sebi make up most of Rajesh Exports' reported business operations. The regulator said investors may have relied on these financial statements to assess the company's size, earnings and valuation, even though the figures may not have accurately reflected its actual business activities.

The case has also raised concerns about how companies report the performance of overseas subsidiaries and whether such disclosures are properly verified. Sebi has said the investigation is not over and that a fresh forensic review will examine the group's accounts, fund movements, related-party transactions and overall financial position in greater detail.