Market regulator the Securities and Exchange Board of India (SEBI) has issued an interim ex-parte order against Rajesh Exports Ltd (REL), alleging widespread financial misrepresentation of about ₹15.15 lakh crore, non-disclosure of material information, questionable accounting practices and misuse of corporate funds. Pending further directions, SEBI has restrained promoter and executive chairman Rajesh Mehta from buying, selling or otherwise dealing in the company's securities. Shares of the gems and jewellery company dropped 5% to hit the lower circuit limit on Thursday. At the BSE, the scrip declined 4.99% to hit the lower circuit limit of Rs104.65.
In
a 109-page order issued on 3 June 2026, Kamlesh Chandra Varshney, whole-time member (WTM) of SEBI, observed: "The aberrations prima facie noted in the matter, where approximately 97% to 99% of the revenues of the company are inflated, are egregious and unheard of... The
ex-parte nature of this order is warranted by the demonstrated pattern of conduct, including REL's own admission of routing funds to conceal their origin, which establishes a real risk that advance notice of proposed directions would enable the noticees to take steps to move assets, destroy records, or otherwise frustrate the regulatory process."
The WTM further stated that a detailed investigation was required into the alleged violations by the noticees and other suspects, including an examination of the company's books of account to ascertain a true and fair picture of its financial position. He directed that the investigation be completed expeditiously without being influenced by the findings recorded in the interim order.
In
a regulatory filing signed by Mr Mehta, Rajesh Exports said SEBI's order is only an interim order and that the regulator has not reached any adverse final conclusion. The company maintained that its reported revenues are accurate and attributed the issues raised by SEBI to a communication gap and misunderstanding between the regulator and the company. It said it is submitting all relevant documents and is confident that SEBI will arrive at the correct conclusion after reviewing the authenticated records.
In
another release submitted to the exchanges, the company says, "The core observation in the order is with regard to the mis-reporting of the revenues, this has emerged primarily due to confusion because SEBI has considered the EBIDTA of Valcambi instead of revenues, hence it has stated that there is a difference of about 97% in the revenues. The consolidated revenues, as stated by the company, are correct."
"The entire matter is a result of confusion and a communication gap, which the company is in the process of addressing with SEBI, and the company is confident that it will be able to clarify the matter with SEBI by presenting all the required and relevant documents. It may be noted that SEBI has not made any adverse observation with regard to the earnings of the company; it has only observed suspicion with regard to revenues, which is primarily because of confusion with regard to the revenues of Valcambi. There is no reason for any listed entity to inflate revenue and maintain the earnings; this will only reduce the margins of the company, which would be adverse to the company," TD Joseph, communication-in- charge at Rajesh Exports, says.
SEBI's investigation and forensic examination have revealed prima facie evidence suggesting that a substantial portion of the company's reported revenues may not be verifiable and that investors may have been presented with a misleading picture of its financial position.
The regulator has directed Rajesh Exports and its promoter to cooperate with the ongoing investigation, furnish the pending documents within 30 days and comply with the disclosure requirements under the listing regulations. SEBI has also ordered the appointment of a new forensic auditor and said it would forward a copy of the order to the National Financial Reporting Authority (NFRA) for examination of the conduct of the company's statutory auditors.
Rajesh Exports has long projected itself as one of the world's largest gold refiners and processors. In earlier public disclosures, the Bengaluru-based company claimed to process around 35% of the world's gold. It reported consolidated revenue of ₹3.39 lakh crore and a profit of ₹1,432 crore in FY22-23, while maintaining a market capitalisation running into thousands of crores.
Those concerns now appear to have formed part of a much broader regulatory investigation.
Investigation Origin
According to SEBI, the matter originated from a shareholder complaint received in March 2024 alleging possible financial misrepresentation in Rajesh Exports' books, particularly regarding large trade receivables that had remained outstanding for extended periods.
SEBI appointed an investigating authority in October 2024 and engaged BDO India Services Pvt Ltd as a forensic auditor in December 2024.
The regulator said the company repeatedly failed to provide complete information and did not adequately cooperate with either the investigation or the forensic audit.
According to the order, the forensic auditor was denied access to key accounting records, enterprise resource planning (ERP) systems and journal dumps. The company also allegedly withheld information relating to overseas subsidiaries and provided incomplete ledger records, making independent verification difficult.
The forensic auditor reportedly received complete documentation for only a small fraction of sampled transactions running into thousands of crores.
Overseas Subsidiaries under Scrutiny
A major focus of SEBI's investigation concerns Rajesh Exports' overseas subsidiary structure, particularly Swiss-based Valcambi SA, one of the world's largest precious-metals refiners.
SEBI observed that between FY20-21 and FY25-26, between 97% and 99% of Rajesh Exports' consolidated revenues were attributed to subsidiaries and step-down subsidiaries rather than the Indian listed entity itself. In FY22-23, for instance, the company reported consolidated revenue of ₹3.39 lakh crore, while stand-alone revenue was only ₹5,762 crore.
The regulator alleged that Rajesh Exports failed to publish audited financial statements of several subsidiaries despite statutory requirements and repeatedly failed to provide detailed customer, vendor, inventory and debtor information relating to those overseas operations.
SEBI rejected the company's argument that Swiss privacy laws prevented such disclosures, stating that those laws do not prohibit the sharing of corporate financial information with regulators and cannot override obligations under Indian securities laws.
Revenue Inflation Allegations
One of the most serious findings in the order concerns the manner in which revenues from overseas subsidiaries were consolidated.
SEBI compared the audited stand-alone financial statements of Valcambi SA with the consolidated figures reported by Rajesh Exports and related group entities. According to the regulator, Valcambi's reported stand-alone revenue was only a small fraction of the massive consolidated revenues claimed by the group.
The order notes that Rajesh Exports failed to provide invoices, customer records, vendor details or other transaction-level evidence supporting those consolidated figures, despite repeated requests.
Based on its analysis, SEBI concluded that Rajesh Exports had prima facie misrepresented approximately ₹15.15 lakh crore of revenues attributed to subsidiaries between FY20-21 and FY24-25, representing around 99.8% of subsidiary-generated revenue during the period.
The regulator stated that the company's disclosures appeared to have created an inflated picture of its operational scale, financial position and business performance, potentially misleading investors.
Questions over Affluence Transactions
SEBI also examined transactions involving Affluence Shares and Stocks Pvt Ltd, a SEBI-registered stockbroker.
According to the order, Rajesh Exports recorded sales and purchases worth approximately ₹11,487 crore and ₹11,488 crore, respectively, with Affluence during FY21-22 to FY23-24. These transactions accounted for roughly two-thirds of the company's standalone sales and purchases during the period.
However, the regulator found that Affluence had never treated Rajesh Exports as a client and had no contractual relationship with the company. Instead, records allegedly indicated that the transactions corresponded to gold derivative trades executed by Rajesh Mehta through his personal trading account.
SEBI said Mr Mehta transferred ₹7.45 crore to Affluence through his personal account and incurred trading losses of around ₹3.5 crore. The regulator alleged that recording these personal trades as company transactions artificially inflated Rajesh Exports' standalone sales and purchase figures.
Fund Routing through Personal Accounts
The order also highlights what SEBI described as extensive routing of company funds through personal bank accounts belonging to Rajesh Mehta and other related parties.
The regulator identified transactions aggregating to hundreds of crores moving between the company and personal accounts. It noted that Rajesh Exports disclosed only nominal remuneration payments to Mr Mehta in its annual reports, despite significant fund transfers.
SEBI said the company admitted that funds were routed through personal accounts to maintain confidentiality, facilitate transfers and conceal originating bank accounts. However, it allegedly failed to provide board approvals, agreements or documentary evidence supporting such arrangements.
The regulator described these practices as a serious governance failure and alleged that related-party transactions were neither properly disclosed nor appropriately approved.
Interim Directions
In explaining the need for urgent intervention, SEBI said the alleged violations were not isolated incidents but part of a systematic, multi-year pattern involving financial misrepresentation, incorrect consolidation, fund routing and opaque accounting practices.
The regulator stated that investors continued to trade in Rajesh Exports shares without access to what may be the company's true financial position and warned that assets could potentially be dissipated if immediate preventive action was not taken.
In unusually strong language, SEBI described the apparent inflation of 97% to 99% of the company's revenues as 'egregious and unheard of'.
Pending completion of the investigation, SEBI has:
- Restrained Rajesh Mehta from buying, selling or dealing in Rajesh Exports securities until further orders.
- Directed Rajesh Exports and its promoter to provide documents and explanations sought by investigators within 30 days.
- Ordered the company to make true and fair disclosures relating to financial statements and related-party transactions.
- Directed the appointment of a new forensic auditor.
- Referred the conduct of the company's statutory auditors to the NFRA for possible action.
SEBI emphasised that the findings recorded in the interim order are preliminary in nature. Rajesh Exports and Rajesh Mehta will have an opportunity to file objections and seek a personal hearing before any final action is taken.
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