Summary of this article
Sebi upholds the interim trading ban on promoter Rajesh Mehta.
Investigation reveals suspected revenue misrepresentation of Rs 15 lakh crore.
Shares of Rajesh Exports drop following the regulatory action.
The Securities and Exchange Board of India (Sebi) passed a Confirmatory Order upholding the ex-parte interim directions against Rajesh Exports (REL) and its promoter, Rajesh Mehta on October 14, 2026.
Earlier in 2025, the market regulator had probed the company for financial misrepresentation and undisclosed related-party fund routing. Notably, shares of the company have fallen nearly four per cent in the day’s trade to Rs 53.90 apiece on the NSE following the order.
What Sebi Said In Its Order Against Rajesh Exports
In its order, Sebi directed that interim restrictions against Rajesh Exports and its promoter Rajesh Mehta will remain in force until further orders. Additionally, Sebi barred Mehta from accessing the market with respect to the company’s shares and ordered the firm to maintain transparency in its statutory filings.
“Noticee no. 2, Mr. Rajesh Mehta, shall continue to be restrained from buying, selling or otherwise dealing, directly or indirectly, in the securities of Rajesh Exports Limited, in any manner whatsoever, until further orders,” Sebi said.
Additionally, Sebi has also ordered both the company and Mehta to cooperate fully with the investigating authority and the forensic auditor by submitting all pending information and explanations listed in the order.
Rajesh Exports was also directed to make true, fair, accurate, and complete disclosures of its financial statements and related-party transactions under the Listing Obligations and Disclosure Requirements (LODR) Regulations.
Addressing the company’s argument that its financial statements were already audited and recorded for legitimate commercial purposes, the regulator noted that accounting entries do not resolve verification gaps.
“However, audit or accounting treatment, by itself, does not answer the specific concerns arising from the underlying information and disclosures where the material furnished to the regulator remains insufficient for independent verification,” Sebi said.
The regulator also dismissed Mehta’s plea to remove the trading ban on the grounds that he had not traded in the company’s shares or derived any personal monetary benefit from the routed funds. Sebi noted that since the investigation into the company’s financial affairs remains incomplete, preventive measures are required to protect retail investors.
“The purpose is to preserve the status quo and protect investors and the integrity of the securities market while the investigation into the financial affairs, transactions and disclosures of REL remains incomplete,” Sebi said.
What Sebi Found In Its Probe
The regulatory action and the current order follow a complaint received by Sebi alleging potential financial misrepresentation in the books of Rajesh Exports regarding trade receivables that remained outstanding for more than two years.
Following the complaint, Sebi initiated an investigation from April 1, 2020 to March 31, 2024, and appointed BDO India Services as a forensic auditor on December 3, 2024.
During its probe, the company and Mehta were found to have repeatedly submitted incomplete documents and had also failed to provide access to key documents, such as Enterprise Resource Planning (ERP) systems, journal dumps, and foreign subsidiary records. This, in-turn, hampered the forensic audit which prompted Sebi to pass an ex-parte interim order on June 3, 2026.
Subsequently, Mehta filed written submissions on June 16, 2026 and attended a personal hearing on August 25, 2026, after seeking an adjournment on August 11, 2026, and submitted additional clarifications on August 26, 2026.
However, Sebi’s investigation uncovered massive prima facie irregularities across both consolidated and standalone financial statements. The regulator found that Rajesh Exports had misrepresented consolidated revenues aggregating to approximately Rs 15,15,385 crore or 99.80 per cent of its total consolidated revenue from FY 2020-21 to FY 2024-25.
Mehta was also found to have withheld subsidiary financial statements citing Swiss data-protection laws. On a standalone basis, the company misrepresented revenues of Rs 12,557 crore, or 64.53 per cent of its standalone revenue between FY 2020-21 and FY 2023-24.
This included falsely recording personal derivative trades executed by Mehta of around Rs 11,487 crore in sales and Rs 11,488 crore in purchases as the company’s own operations, alongside misclassifying foreign exchange fluctuations and mutual fund interest as operational revenue.
The company also artificially reduced Rs 2,914 crore in long-outstanding receivables through opaque arrangements and routed corporate funds through the personal bank accounts of Rajesh Mehta and his son, Siddharth Mehta, as well as a promoter-controlled entity named Elest., without board approval or shareholder disclosures.
“Thus, the material available on record prima facie establishes wrongful intention of Noticees to induce the investors to deal in securities of the Company, by giving them a patently incorrect picture about the financial status of the Company,” Sebi said.
At the time of writing, the shares of Rajesh Exports were trading at Rs 54.25 apiece, down by over three per cent on the NSE.
