SEBI’s Allegations Against Rajesh Exports
The Securities and Exchange Board of India (SEBI) has leveled serious allegations against Rajesh Exports Limited (REL), accusing the company of inflating its revenue figures by ₹15.44 lakh crore over a five-year span. This alleged inflation pertains to the fiscal years 2020-21 through 2024-25. SEBI’s interim order, issued on June 3, restrains Rajesh Exports’ promoter and Executive Chairman, Rajesh Mehta, from engaging in any securities transactions involving the company pending further investigation.
Discrepancies in Subsidiary Revenues
According to SEBI Whole Time Member Kamlesh Chandra Varshney, the revenue misrepresentation predominantly involves overseas subsidiaries, with a particular focus on a Switzerland-based subsidiary. SEBI’s findings suggest that the actual revenue from this subsidiary was significantly lower than reported, resulting in a discrepancy of approximately ₹15.15 lakh crore—representing 99.80% of the purported revenue attributed to subsidiaries during the specified period.
Details of SEBI’s Interim Order
SEBI’s interim order highlights that Rajesh Exports may have misrepresented its financial health and operational scale to investors. This misrepresentation is considered egregious, with SEBI noting that approximately 97% to 99% of the company’s revenue was falsely inflated. The investigation was initiated following a shareholder complaint in March 2024, which raised concerns about potential financial misrepresentation, including large outstanding trade receivables.
Rajesh Exports’ Business Operations
Rajesh Exports, a significant player in gold refining and manufacturing, exports its products globally and operates retail showrooms in India under the SHUBH Jewellers brand. The company’s shares are listed on the Bombay Stock Exchange and the National Stock Exchange, with a market capitalization of ₹3,210 crore as of June 3, 2026.
Focus on Overseas Subsidiaries
A substantial portion of SEBI’s order concentrates on the operations of Rajesh Exports’ overseas subsidiaries, including Switzerland-based Valcambi SA and Global Gold Refineries AG (GGR). Despite Valcambi SA being portrayed as a key revenue driver, its standalone revenue was only ₹542.68 crore in 2023. In contrast, GGR reported consolidated revenue of about ₹2.92 lakh crore, while Rajesh Exports claimed a consolidated revenue of about ₹2.80 lakh crore.
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SEBI’s Findings on Revenue Reporting
SEBI found inconsistencies in the revenue figures, questioning the assertion that Valcambi SA was the main operating entity. The regulator dismissed Rajesh Exports’ explanation that Valcambi SA only accounted for processing revenues, while GGR recorded the gross value of gold transactions. SEBI also rejected the company’s claim that Swiss data protection laws prevented the disclosure of financial information, as these laws protect only personal data, not corporate financials.
Investor Impact and Non-Cooperation
SEBI’s order emphasizes the information asymmetry caused by Rajesh Exports’ actions, which left investors unaware of the company’s true financial status. The order also notes non-cooperation from Rajesh Exports and Mehta, including restricted access to ERP systems and financial records, hindering the forensic audit.
Financial Misconduct Allegations
SEBI discovered that ₹7.45 crore was transferred from Rajesh Exports to Mehta for trading in gold derivatives, resulting in losses of ₹3.50 crore. Subsequently, ₹3.91 crore was returned to the company. SEBI’s investigation revealed Mehta’s active involvement in the company’s financial operations, with Managing Director Suresh Gowda confirming Mehta’s exclusive control over overseas subsidiaries.
Next Steps in SEBI’s Investigation
SEBI has ordered Rajesh Exports and Mehta to cooperate with its ongoing investigation, requiring them to provide necessary documents within 30 days. A fresh forensic audit has been mandated, and the order has been forwarded to the National Financial Reporting Authority for potential action against the company’s auditors. Rajesh Exports and Mehta have 21 days to file objections and request a personal hearing.
