Summary:
Rajesh Exports shares hit the lower circuit after SEBI issued an interim order alleging large-scale revenue misstatement, governance lapses and fund-routing irregularities. The regulator claimed the company overstated consolidated revenues by around ₹15.15 lakh crore between FY21 and FY25. The development has raised concerns among investors and triggered fresh scrutiny of the company's financial reporting and corporate governance practices.
The Securities and Exchange Board of India (SEBI) has passed an interim ex-parte order against Rajesh Exports Limited (REL) and its Chairman and Managing Director, Rajesh Mehta, citing prima facie evidence of large-scale financial misrepresentation, fund-routing irregularities, governance lapses and non-cooperation during an ongoing investigation. The market regulator has alleged that the company misrepresented consolidated revenues aggregating approximately ₹15.15 lakh crore between FY21 and FY25, representing about 99.80% of its reported consolidated revenue during the period.
In its 109-page interim order dated June 3, SEBI stated that Rajesh Exports allegedly engaged in a multi-year pattern of recording non-genuine transactions, adopting improper accounting treatments, routing corporate funds through personal accounts and promoter-linked entities, and failing to make adequate disclosures to investors. The regulator observed that these actions may have enabled the company to present an inflated picture of its operational scale, financial position and overall financial health.
Revenue Inflation Linked to Overseas Subsidiaries
A key focus of SEBI’s findings relates to the company’s overseas subsidiaries, particularly Valcambi SA. According to the regulator, between 97% and 99% of Rajesh Exports’ consolidated revenue originated from foreign subsidiaries. However, audited standalone financial statements of these entities, especially Valcambi SA, reflected only a fraction of the revenues reported at the consolidated level.
SEBI alleged that the company recognised gross gold transaction values instead of only refining or processing income and failed to provide supporting invoices, customer records and accounting documentation to justify the reported figures. The regulator stated that this resulted in the alleged misrepresentation of approximately ₹15.15 lakh crore in revenues attributed to subsidiaries during FY21-FY25.
Standalone Revenue Irregularities Identified
Apart from consolidated accounts, SEBI also alleged misrepresentation of standalone revenues amounting to ₹12,557 crore during FY21-FY24. According to the order, derivative transactions executed by Rajesh Mehta in his personal capacity were incorrectly recorded as company sales of ₹11,487 crore and purchases of ₹11,488 crore.
The regulator further stated that exchange fluctuations of ₹867 crore and ₹716 crore were classified as revenue and purchases respectively, while ₹204 crore earned as interest income from mutual funds and fixed deposits was allegedly booked as revenue from operations.
Questions Over Investments and Fund Routing
SEBI also questioned the company’s claim regarding investments in gold mines in Africa. According to the order, the reported “Other Non-Current Investments” could not be corroborated through available financial statements.
The regulator further alleged that company funds were routed through the personal bank accounts of Rajesh Mehta and Siddharth Mehta without disclosure as related-party transactions or obtaining approval from the board and audit committee. SEBI noted that such transactions reflected serious corporate governance concerns and inadequate disclosure practices.
Investigation Hampered by Non-Cooperation
The investigation originated from a shareholder complaint received in March 2024 regarding substantial trade receivables in the company’s accounts. Following this, SEBI appointed BDO India Services as a forensic auditor.
However, the regulator stated that Rajesh Exports failed to provide access to key accounting systems and documents, preventing independent verification of a significant portion of transactions. SEBI noted that only a limited number of sampled transactions could be fully substantiated, while several overseas subsidiary transactions remained unverifiable.
Regulatory Action and Auditor Scrutiny
Given the seriousness of the findings, SEBI has barred Rajesh Mehta from buying, selling or dealing in Rajesh Exports securities until further orders. The regulator has also directed the company to submit all pending information within 30 days, ensure true and fair disclosures, and fully cooperate with a fresh forensic audit.
Additionally, the matter has been referred to the National Financial Reporting Authority (NFRA) for examination of the conduct of the company’s statutory auditors, with SEBI highlighting possible dereliction of duties.
Rajesh Exports Share Price Hit Lower Circuit
Investor sentiment turned sharply negative following the order. Rajesh Exports shares fell 5% and hit the lower circuit at ₹103.92 on the NSE and ₹104.65 on the BSE.
Shareholding data shows that LIC held a 10.80% stake in the company as of the March 2026 quarter, while foreign institutional investors held nearly 14%. SEBI described the alleged inflation of 97%-99% of revenue as “egregious and unheard of”, underscoring the gravity of the case and the need for immediate regulatory intervention to protect investors and maintain market integrity.
