BT Explainer: What Sebi’s interim order against Rajesh Exports and its promoter reveals
Sebi has alleged that Rajesh Exports prima facie misrepresented about Rs 15.15 lakh crore, which is almost 99.80 per cent of its revenues attributed to subsidiaries during FY2020-21 to FY2024-25.
- Jun 4, 2026,
- Updated Jun 4, 2026 9:11 AM IST
From hugely inflated revenues to funds rerouting, to lack of disclosures, the interim order against Rajesh Exports by the Securities and Exchange Board of India indicates problems at a massive scale at the gold refiner and jeweller listed on both BSE and NSE. The Order The market regulator has now restrained the company’s promoter, Rajesh Mehta, from buying, selling or dealing in securities of the company, either directly or indirectly, in any manner whatsoever, until further orders. Also, the company will have to make true and fair disclosures of its financial statements, related party transactions and other disclosures. Sebi has said that a detailed investigation by the regulator is required in the instant matter with respect to violations committed by the company, its promoter and other suspects, including but not limited to the examination of the books of account of the company to bring out a true and fair picture of the company’s financials. A new forensic auditor will be appointed to complete a forensic audit of the books of accounts of Rajesh Exports. The company and its promoter have been directed to cooperate with the forensic auditor appointed in this regard and provide all information asked for by the forensic auditor. The earlier forensic auditor didn’t receive any cooperation from the company or the promoter, it noted. Furthermore, the order is going to be forwarded to the National Financial Reporting Authority for appropriate action, as Sebi alleged prima facie misconduct and dereliction of duties on the part of the statutory auditors. What prompted the order? In March 2024, Sebi had received a complaint from a shareholder of the Bengaluru-based company where it was alleged potential financial misrepresentation in the books of Rajesh Exports with respect to a large sum of trade receivables outstanding for more than two years. Following a preliminary investigation, Sebi appointed an investigating authority in October 2024 to investigate possible violations of provisions of the Securities Contracts (Regulation) Act, Sebi (Listing Obligations and Disclosure Requirements) Regulations and Sebi (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets) Regulations, among others. A forensic auditor was later appointed in December 2024. Prima Facie Findings Sebi alleged that Rajesh Exports prima facie misrepresented about Rs 15.15 lakh crore, which is almost 99.80 per cent of its revenues, which were attributed to subsidiaries during the financial years 2020-21 to 2024-25. “The aberrations prima facie noted in the matter, where approximately 97-99 per cent of the revenue of the Company is inflated, are egregious and unheard of,” the order states. It appeared to have prima facie enabled Rajesh Exports “to portray an inflated and misleading picture of its operational scale, consolidated financial position and financial health before investors and the securities market.” The interim order further alleges that the company failed to provide access to its Enterprise Resource Planning (ERP) systems and books of accounts. Furthermore, Sebi alleges that Rajesh Exports refused to share requisite data with respect to its foreign subsidiaries, taking shelter under the Swiss Federal Act on Data Protection. Consequently, it says, the forensic auditor’s review was confined solely to financial statements, without access to primary evidentiary records. “Even where ledgers were produced, they were found to be deficient,” Sebi noted in its order. The investigators, during the course of the probe, also examined transactions of its foreign subsidiaries like Valcambi, REL Singapore and Global Gold Refineries, Switzerland, among others. Sebi noted instances where corporate funds were routed through personal bank accounts of Rajesh Mehta for various reasons such as maintaining confidentiality of the company’s bank accounts, facilitation of onward transfers, parking funds for court proceedings, interest-free loan arrangements and routing transactions without revealing originating bank accounts. The company failed to provide any documentary evidence, such as board approvals supporting the routing of funds through the promoter’s personal bank accounts, it said. “Rajesh Exports has, inter alia, admitted vide email dated March 17, 2026, that funds were routed through Rajesh Mehta’s bank account ‘without revealing the bank account from which the funds had come’. In my view, the said explanation itself indicates intentional obfuscation of fund trails and layering of transactions through the promoter’s personal bank account,” the order states.
From hugely inflated revenues to funds rerouting, to lack of disclosures, the interim order against Rajesh Exports by the Securities and Exchange Board of India indicates problems at a massive scale at the gold refiner and jeweller listed on both BSE and NSE. The Order The market regulator has now restrained the company’s promoter, Rajesh Mehta, from buying, selling or dealing in securities of the company, either directly or indirectly, in any manner whatsoever, until further orders. Also, the company will have to make true and fair disclosures of its financial statements, related party transactions and other disclosures. Sebi has said that a detailed investigation by the regulator is required in the instant matter with respect to violations committed by the company, its promoter and other suspects, including but not limited to the examination of the books of account of the company to bring out a true and fair picture of the company’s financials. A new forensic auditor will be appointed to complete a forensic audit of the books of accounts of Rajesh Exports. The company and its promoter have been directed to cooperate with the forensic auditor appointed in this regard and provide all information asked for by the forensic auditor. The earlier forensic auditor didn’t receive any cooperation from the company or the promoter, it noted. Furthermore, the order is going to be forwarded to the National Financial Reporting Authority for appropriate action, as Sebi alleged prima facie misconduct and dereliction of duties on the part of the statutory auditors. What prompted the order? In March 2024, Sebi had received a complaint from a shareholder of the Bengaluru-based company where it was alleged potential financial misrepresentation in the books of Rajesh Exports with respect to a large sum of trade receivables outstanding for more than two years. Following a preliminary investigation, Sebi appointed an investigating authority in October 2024 to investigate possible violations of provisions of the Securities Contracts (Regulation) Act, Sebi (Listing Obligations and Disclosure Requirements) Regulations and Sebi (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets) Regulations, among others. A forensic auditor was later appointed in December 2024. Prima Facie Findings Sebi alleged that Rajesh Exports prima facie misrepresented about Rs 15.15 lakh crore, which is almost 99.80 per cent of its revenues, which were attributed to subsidiaries during the financial years 2020-21 to 2024-25. “The aberrations prima facie noted in the matter, where approximately 97-99 per cent of the revenue of the Company is inflated, are egregious and unheard of,” the order states. It appeared to have prima facie enabled Rajesh Exports “to portray an inflated and misleading picture of its operational scale, consolidated financial position and financial health before investors and the securities market.” The interim order further alleges that the company failed to provide access to its Enterprise Resource Planning (ERP) systems and books of accounts. Furthermore, Sebi alleges that Rajesh Exports refused to share requisite data with respect to its foreign subsidiaries, taking shelter under the Swiss Federal Act on Data Protection. Consequently, it says, the forensic auditor’s review was confined solely to financial statements, without access to primary evidentiary records. “Even where ledgers were produced, they were found to be deficient,” Sebi noted in its order. The investigators, during the course of the probe, also examined transactions of its foreign subsidiaries like Valcambi, REL Singapore and Global Gold Refineries, Switzerland, among others. Sebi noted instances where corporate funds were routed through personal bank accounts of Rajesh Mehta for various reasons such as maintaining confidentiality of the company’s bank accounts, facilitation of onward transfers, parking funds for court proceedings, interest-free loan arrangements and routing transactions without revealing originating bank accounts. The company failed to provide any documentary evidence, such as board approvals supporting the routing of funds through the promoter’s personal bank accounts, it said. “Rajesh Exports has, inter alia, admitted vide email dated March 17, 2026, that funds were routed through Rajesh Mehta’s bank account ‘without revealing the bank account from which the funds had come’. In my view, the said explanation itself indicates intentional obfuscation of fund trails and layering of transactions through the promoter’s personal bank account,” the order states.