The Securities and Exchange Board of India (SEBI) has taken strong interim action against Rajesh Exports, a prominent gold refiner and jeweller, and its promoter, Rajesh Mehta. The market regulator's order comes after preliminary findings suggested egregious financial misrepresentation, including the inflation of revenues by an astounding ₹15.15 lakh crore over five financial years.
The interim order, issued on June 4, 2026, restricts Rajesh Mehta from engaging in any securities transactions involving Rajesh Exports, directly or indirectly, until further notice. Additionally, the company has been directed to ensure accurate and transparent disclosures of its financial statements, related party transactions, and other crucial information.
Allegations of Massive Revenue Inflation
SEBI's investigation, triggered by a shareholder complaint in March 2024, uncovered what it describes as an "unheard of" scale of financial irregularities. The regulator alleges that Rajesh Exports misrepresented approximately 99.80% of its revenues attributed to subsidiaries between the financial years 2020-21 and 2024-25. This inflated figure, amounting to roughly ₹15.15 lakh crore, is believed to have created a misleading perception of the company's operational scale and financial health among investors.
The interim order highlights that these aberrations were primarily noted in the company's consolidated financial position, creating a distorted picture for the securities market.
Lack of Cooperation and Fund Rerouting
A significant hurdle in the investigation has been the alleged lack of cooperation from Rajesh Exports and its promoter. SEBI noted that the company failed to provide access to its Enterprise Resource Planning (ERP) systems and books of accounts. Furthermore, it reportedly refused to share essential data concerning its foreign subsidiaries, citing the Swiss Federal Act on Data Protection, which severely limited the forensic auditor's ability to review primary evidentiary records.
Investigators also identified instances where corporate funds were routed through Rajesh Mehta's personal bank accounts. SEBI's order details various reasons cited for this practice, including maintaining confidentiality, facilitating onward transfers, and parking funds for court proceedings. However, the company reportedly failed to provide documentary evidence, such as board approvals, to support these actions. SEBI views this as an "intentional obfuscation of fund trails and layering of transactions."
Next Steps in the Investigation
SEBI has emphasized the need for a comprehensive investigation into the alleged violations by Rajesh Exports, its promoter, and other involved parties. A new forensic auditor will be appointed to conduct a thorough audit of the company's books, and both the company and Mehta have been directed to cooperate fully. The order will also be forwarded to the National Financial Reporting Authority (NFRA) for potential action against the statutory auditors for prima facie misconduct and dereliction of duties.