Bengaluru/New Delhi: In one of the most significant regulatory actions in recent years, the Securities and Exchange Board of India (SEBI) has issued a 109-page interim order accusing leading gold jewellery exporter Rajesh Exports Limited (REL) of misrepresenting nearly ₹15.15 lakh crore in consolidated revenues between FY21 and FY25.

The regulator has barred promoter and Executive Chairman Rajesh Mehta from dealing in the company’s securities and ordered a fresh forensic audit.

Massive Revenue Misstatement Alleged

According to SEBI’s interim findings, 97-99% of Rajesh Exports’ consolidated revenues during the five-year period were attributed to subsidiaries, primarily the Switzerland-based Valcambi SA, which the company acquired in 2015. However, the regulator claims these figures were not backed by verifiable transactions, proper invoices, or customer details.

Valcambi’s standalone audited financials reportedly showed only negligible processing fee income, starkly contrasting with the massive group-level numbers.

SEBI has also flagged instances where personal derivative trades of the promoter were allegedly recorded as company sales and purchases worth around ₹11,487 crore each. Additionally, approximately ₹9.26 billion in company funds were allegedly diverted without proper board or audit committee approvals.

Key Allegations in SEBI Order

  • Unverifiable and non-genuine transactions in subsidiary consolidation.

  • Lack of supporting documentation for claims such as investments in African gold mines worth ₹1,035 crore.

  • Non-cooperation during the investigation, including citing Swiss privacy laws (which SEBI rejected) and incomplete data sharing.

  • Governance failures, including inadequate disclosures on related-party transactions.

The probe was triggered by a shareholder complaint in March 2024 regarding high trade receivables. SEBI has referred the conduct of the company’s auditors to the National Financial Reporting Authority (NFRA).

Market Reaction and Investor Impact

Following the order issued on June 3, 2026, Rajesh Exports shares crashed up to 5% and hit the lower circuit on June 4, trading around ₹103-104. The stock has declined over 80% in the past five years and more than 40% year-to-date.

Life Insurance Corporation (LIC), holding nearly 10-11% stake, has seen significant erosion in the value of its investment.

Company’s Response

Rajesh Exports and Rajesh Mehta have strongly denied the allegations.

In statements to media, Mehta described the order as “interim” and said “nothing true” in it.

The company termed the issues as possible “communication gaps” and stated it is preparing a detailed response with all required documents.

It maintains that the revenues declared are correct and plans to submit clarifications to SEBI.

Historical Red Flags

Concerns about Rajesh Exports’ accounting practices are not new. Veteran journalist Debashis Basu had raised questions as early as 2014 about “something funny with its accounting,” zero-tax profits, and mysterious related-party dealings.

Similar doubts were echoed over the years regarding the company’s high reported revenues despite thin margins and opaque subsidiary operations.

Background

Rajesh Exports, founded in 1989 by Rajesh Mehta and his brother, is one of India’s largest gold jewellery manufacturers and exporters with a global footprint through Valcambi.

The company has faced past regulatory actions, including a 2003 SEBI bar on promoters, and ongoing banking disputes with lenders like Canara Bank.

What’s Next?

SEBI has directed the company and promoter to fully cooperate with the ongoing investigation and the new forensic auditor. Both parties have 30 days to respond. The interim order remains in force until further directions, and a final verdict will follow a complete probe.

This development has sent shockwaves through India’s gems and jewellery sector and raised fresh questions about corporate governance standards in listed companies with significant overseas operations.

Public News X will continue to track this fast-developing story. For official details, refer to the SEBI website and company filings on BSE/NSE.

Disclaimer: This article is based on publicly available information and regulatory orders as of June 4, 2026. Readers are advised to exercise due diligence.

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