Who is Rajesh Mehta? All about Sebi action on Rajesh Exports and what has happened so far

Rajesh Mehta, founder and Executive Chairman of jewellery maker Rajesh Exports Ltd, has come under regulatory scrutiny after the Securities and Exchange Board of India (Sebi) issued an interim order alleging that the company misrepresented a substantial portion of its revenue over a five-year period and diverted company funds without the required approvals and disclosures.

In its interim order, Sebi barred Rajesh Exports and Mehta from accessing the securities market until the completion of its investigation.

Who is Rajesh Mehta?

According to Rajesh Exports' website, Mehta, as Executive Chairman, is responsible for the overall functioning of the company and is specifically in charge of its finance and marketing functions.

The company states that Mehta has more than three decades of experience in the jewellery trade and management.

It also notes that he has travelled extensively in India and overseas to establish industry networks and has been consulted by various gold and jewellery organisations, including government and trade bodies, on business development matters.

What is Sebi alleging?

According to Sebi, around 97–99 per cent of Rajesh Exports' consolidated revenue originated from its overseas subsidiaries, particularly Switzerland-based Valcambi SA. However, the regulator alleged that the company did not consistently disclose the financial statements of its subsidiaries in the public domain.

Sebi noted that while Valcambi SA was presented as the group's principal operating entity, its audited standalone financial statements reflected negligible revenues.

Based on its findings, Sebi alleged that Rajesh Exports misrepresented approximately Rs 15.15 lakh crore, or 99.80 per cent of the revenues generated by its subsidiaries between FY21 and FY25.

The regulator also flagged transactions involving Affluence Shares and Stocks Pvt Ltd. According to the order, Rajesh Exports reported sales of Rs 11,487 crore and purchases of Rs 11,488 crore with Affluence.

However, Affluence reportedly denied carrying out any such transactions.

Sebi alleged that these were non-genuine accounting entries linked to Mehta's personal derivatives trading activities and were used to inflate turnover without any underlying economic substance.

The regulator further alleged that Rajesh Exports routed Rs 338.90 crore of company funds to accounts linked to Mehta, including for his personal derivative trades, without obtaining board or audit committee approvals and without making proper related-party disclosures.

According to Sebi, the alleged misrepresentation of financial statements and diversion of funds resulted in wealth erosion of Rs 12,725.53 crore for the company's shareholders, including retail investors.

What Rajesh Exports said

Responding to the interim order, Rajesh Exports said, "The order is interim and there has been no any adverse conclusion on any aspect arrived by Sebi. The revenues declared by the company are correct and there is no over stating of revenues. There seems to be some type of communication gap and confusion between Sebi and the company. The company is in the process of clarifying all aspects to Sebi by submitting all the required and relevant documents."

It added, "The company is confident that Sebi in its wisdom will clarify the situation and arrive at the correct conclusion based on the authenticated documents which are in the process of submission by the company."

Rajesh Exports further said, "The company rejects all adverse media reports appearing with regard to the interim order of Sebi. The company will be shortly issuing a media clarification which would clarify and settle the unnecessary speculation in the media."

Stock performance

Shares of Rajesh Exports fell 5 per cent to close at Rs 104.65 on Thursday. At this level, the stock has declined 44.63 per cent over the past six months.