The Securities and Exchange Board of India's interim order against Rajesh Exports centres on a startling claim: the company misrepresented Rs 15.15 lakh crore of revenue attributed to overseas subsidiaries between FY21 and FY25.
The market regulator's findings have plunged Rajesh Exports Ltd. (REL) into a two-front crisis. Alongside SEBI's allegations of large-scale financial misrepresentation, lender Canara Bank has initiated debt recovery proceedings against the company. State-owned Life Insurance Corporation of India, which owns a 10.8% stake in REL, is among the major shareholders exposed to the fallout.
At the heart of SEBI's case is a striking mismatch. While REL's consolidated accounts showed revenues running into several lakh crore rupees, audited standalone accounts of Swiss subsidiary Valcambi SA showed annual revenues measured in hundreds of crores. SEBI says this discrepancy raises fundamental questions about how the group's revenues were consolidated and presented to investors.
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Here's a timeline of how the regulator says the story unfolded:
April 2020 — The Numbers Begin
REL reported consolidated revenue of Rs 2.58 lakh crore for FY21. According to SEBI, more than 99% of that revenue was attributed to overseas subsidiaries and step-down subsidiaries. Yet Valcambi SA, which REL later described as the group's principal operating entity, reported revenue of about Rs 586 crore in its audited standalone accounts.
FY2021-22 To FY2022-23 — The Affluence Entries
During FY22, REL recorded sales of Rs 4,625 crore and purchases of Rs 4,627 crore with Mumbai-based broker Affluence Shares and Stocks. The following year, the figures rose to Rs 4,935 crore on both sides.
SEBI alleges these transactions accounted for a substantial portion of REL's standalone revenue in some years and were neither presented to the board nor disclosed as related-party transactions. According to the regulator, the account was linked to promoter Rajesh Mehta's personal derivatives trading activities.
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February 6, 2023 — The Peak
Investor confidence in the company was at its highest. REL's stock touched an all-time high of Rs 1,028.40, taking its market capitalisation to Rs 30,364 crore. The shareholder base had expanded from 22,472 investors to more than two lakh. The company's reported revenue scale was widely reflected in public disclosures and analyst coverage.
June 2023 — The First Crack Appears
REL failed to file its cash-flow statement for FY23 with stock exchanges, a lapse that later drew regulatory attention.
The share price began a prolonged decline, falling from above Rs 500 to a low of Rs 80.11 in April 2026. SEBI estimates that public shareholders saw roughly Rs 12,725 crore in market value erased during the slide.
March 11, 2024 — The Complaint
The turning point came when a shareholder wrote to SEBI alleging potential financial misrepresentation, specifically highlighting large trade receivables that had remained outstanding for more than two years.
The complaint prompted a preliminary examination by the regulator.
October 23, 2024 — Investigation Begins
Following its preliminary review, SEBI formally appointed an Investigating Authority to examine possible violations of securities laws.
A little over a month later, on December 3, 2024, forensic audit firm BDO India was brought in to conduct an independent review.
2025 — The Documentation Battle
As the investigation intensified, SEBI repeatedly sought transaction-level records, customer and vendor details, subsidiary financial statements and supporting documentation.
REL argued that Swiss data protection laws restricted disclosure of information relating to overseas entities. SEBI reviewed those provisions and concluded that the cited law applied to natural persons, not corporate financial information. The regulator also noted that exceptions existed for disclosures made to competent authorities.
The forensic audit faced significant hurdles. According to SEBI, REL provided complete documentation for only 2.03% of a Rs 7,021-crore sample selected for testing. The regulator also noted that statutory auditors who had undertaken to provide working papers and subsidiary financial statements did not subsequently furnish the material.
June 3, 2026 — The Order
The investigation culminated in a sweeping interim ex-parte order by SEBI Whole-Time Member Kamlesh Chandra Varshney.
The regulator's most striking allegation was that REL had prima facie misrepresented approximately Rs 15,15,385 crore of revenue attributed to subsidiaries and step-down subsidiaries between FY21 and FY25. According to SEBI's calculations, that represented 99.8% of the revenues reported through those entities. The order described the alleged irregularities as "egregious and unheard of."
SEBI also pointed to a mismatch between audited revenues reported by Valcambi SA and far larger revenues reflected in consolidated accounts, concluding that the latter could not be independently verified based on the material provided during the investigation.
As part of the interim directions, promoter Rajesh Mehta was barred from buying, selling or otherwise dealing in REL securities pending further proceedings. The stock closed at Rs 108.70 on the day the order was issued.
The Company's Response
On his part, Mehta has disputed the findings. "It is an interim order, findings not accurate," he told NDTV Profit. "We are going through the findings and will share a detailed statement."
The June 3 order represents only SEBI's prima facie view. REL has been given 21 days to file objections and present its defence. But the case has already raised broader questions about subsidiary disclosures, auditor oversight and the challenges regulators face when scrutinising multinational corporate structures.
For investors, the eventual outcome could determine whether one of India's largest reported revenue stories withstands scrutiny — or becomes one of the most consequential accounting controversies in recent market history.
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