SEBI says Rajesh Exports misreported $158bn

The Securities and Exchange Board of India issued an interim order on June 3, alleging that Rajesh Exports misrepresented INR 15,15,385 crore (about $158 billion) of revenue. The regulator barred promoter and chairman Rajesh Mehta from the securities market and ordered a forensic audit.

SEBI’s order says the amount represents 99.8% of revenue that the company attributed to subsidiaries between FY2020-21 and FY2024-25. The probe began after a shareholder complaint in March 2024 about unusually large trade receivables and the firm’s failure to provide subsidiary ownership documents, reconciliation statements and transaction-level evidence.

SEBI alleges the company recognised the full gross value of refined gold sales as its own revenue even when much of the metal belonged to customers and was processed for a fee. The regulator noted that Valcambi’s audited accounts showed a fraction of the group’s claimed revenue, reporting less than 0.5% of the total the group declared.

The order states auditors could not reconcile the consolidated revenue reported by Rajesh Exports with records of its overseas units. SEBI flagged about INR 11,487 crore linked to broker Affluence Shares and Stocks; the broker informed the regulator Rajesh Exports was not its client and that no such trades occurred. The regulator also alleges company funds were transferred to Mehta’s personal account for derivative trading without board approval.

Rajesh Exports rejected the allegations in an exchange filing, describing the order as interim and non-final. The company reiterated that its revenue reporting follows accounting standards and attributed the gap to a comparison of gross gold values with processing income. The firm said it will issue a media clarification.

Markets reacted on June 4, when Rajesh Exports’ stock hit its lower trading circuit near INR 104. State-owned insurer Life Insurance Corporation holds about 10.8% of the company and roughly 194,000 retail shareholders hold the stock. SEBI’s directions are interim and ex-parte; the company has 30 days to submit a detailed response before the forensic audit proceeds.

One analyst described the sums identified by SEBI as ‘one of its biggest accounting frauds ever.’ The interim order does not establish a final finding. The forensic audit and the company’s written response will inform whether the regulator’s preliminary misrepresentation finding is sustained and what further legal or regulatory steps may follow.