Corporate Governance Shock: SEBI Freezes Rajesh Exports Operations Over Alleged ₹15.15 Lakh Crore Revenue Fraud

A 109-page ex-parte interim order details a massive network of unverified circular trading, personal gold derivative routing, and uncorroborated African gold mine assertions.

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The Securities and Exchange Board of India (SEBI) has issued a stinging, 109-page ex-parte interim order against Rajesh Exports Limited (REL) and its Chairman and Managing Director, Rajesh Mehta. The market regulator has charged the Bengaluru-based gold refiner and jewelry manufacturer with orchestrating a massive financial misrepresentation scheme, estimating that the company fabricated or heavily inflated consolidated revenues totaling an astonishing ₹15.15 lakh crore between FY 2020-21 and FY 2024-25.

According to the enforcement text signed by SEBI Whole-Time Member Kamlesh Chandra Varshney, this alleged manipulation accounts for 99.8% of the total consolidated revenue reported by the blue-chip company over the five-year window. Pending a deeper forensic review, the regulator has barred Rajesh Mehta from buying, selling, or dealing in securities of the company, effectively freezing executive market privileges.

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Massive Mismatch Exposed Between Parent and Swiss Subsidiaries

The investigation originated from a shareholder complaint in March 2024 regarding unusually high trade receivables left un-collected for more than two years. When forensic auditors from BDO India Services attempted to verify the company’s global gold channels, they hit a wall of non-cooperation.

The core of SEBI’s case exposes a glaring structural mismatch between the company’s massive consolidated statements and the true operating records of its high-profile Swiss step-down subsidiary, Valcambi SA.

When questioned about the massive multi-trillion rupee disconnect, Rajesh Exports tried to shield its financial data by citing strict Swiss data protection laws and private confidentiality mandates. SEBI rejected this defense, stating firmly that listed corporate entities cannot use foreign privacy rules to bypass statutory disclosure requirements in Indian capital markets.

Personal Bank Accounts Used for Circular Cash Routings

The regulatory order goes beyond reporting errors, alleging systematic diversions of public funds and shell accounting. Auditors discovered that hundreds of crores of company capital were systematically routed through the personal bank accounts of Rajesh Mehta and Siddharth Mehta without receiving authorizations from the board of directors or the audit committee.

Furthermore, SEBI raised flags regarding the company’s high-profile disclosures claiming substantial investments in gold mines across Africa. The regulator stated it was completely unable to find or verify any physical or financial evidence confirming the existence of these “Other Non-Current Investments.”

“The pattern of routing substantial sums through the personal bank accounts of corporate officers, coupled with the complete absence of approvals, non-disclosure, and inconsistent explanations, demonstrates a systemic failure of corporate governance,” Varshney stated in the order. “The aberrations noted in this matter are egregious and unheard of.”

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Markets React: Share Prices Plunge into Circuit Filters

The regulatory shockwave hit Dalal Street immediately, triggering mass institutional exits. Shares of Rajesh Exports crashed by their maximum daily limit of 5% for the second consecutive trading session on Friday, hitting a multi-year low of ₹98.73 on the National Stock Exchange (NSE) and ₹99.45 on the Bombay Stock Exchange (BSE).

The sudden drop has exposed major institutional shareholders to heavy capital erosion. State-owned giant Life Insurance Corporation of India (LIC), which commands a significant 10.8% equity stake in the gold refiner, is among the largest institutional investors currently caught in the fallout.

Rajesh Exports Denies Misconduct, Cites “Communication Gap”

In an official regulatory filing submitted to the exchanges on Friday afternoon, Rajesh Exports denied all allegations of bookkeeping fraud, maintaining that its consolidated revenues are accurate.

The company claimed that the ₹15.15 lakh crore anomaly is simply a misunderstanding by SEBI officials. Management argued that the regulator incorrectly substituted Valcambi’s lower core EBITDA figures for its gross global top-line revenue, creating a massive artificial accounting gap. The gold manufacturer stated it is gathering authenticated trade documents to resolve the “communication gap” with the regulator and remains fully confident it will clear its name during the upcoming institutional hearings.

FAQ Section

What are the main allegations against Rajesh Exports in the SEBI interim order?

SEBI has accused Rajesh Exports of fabricating or inflating its consolidated revenues by ₹15.15 lakh crore between FY21 and FY25, representing 99.8% of its reported revenue. The regulator also alleged fund routing through personal promoter accounts, lack of disclosures, and unverified investments in African gold mines.

Why did Rajesh Exports shares hit the lower circuit?

Following the publication of the 109-page interim order, panic-selling hit the stock. The shares fell by their maximum permitted limit of 5% for two straight days, closing at ₹98.73 on the NSE as institutional investors rushed to limit exposure.

How has the management of Rajesh Exports responded to the fraud claims?

The company has denied all allegations of financial irregularities. In a formal exchange filing, the management stated that their financial reporting is accurate and blamed the dispute on a technical “communication gap,” claiming SEBI officials confused Valcambi’s core EBITDA figures with its gross revenue numbers.

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