- SEBI flagged Rs 15.15 lakh crore revenue misrepresentation by Rajesh Exports in an interim order
- Nearly 98-99% of Rajesh Exports revenue reportedly came from foreign subsidiaries, raising transparency issues
- Concerns were raised over revenue figures of a Swiss subsidiary and other overseas units' financial reporting
The Securities and Exchange Board of India has barred jewellery and gold refining major Rajesh Exports and its promoter Rajesh Mehta from the securities market, alleging one of the largest revenue misrepresentation cases in Indian corporate history — a discrepancy of Rs 15.15 lakh crore across five financial years.
The interim order, stemming from a shareholder complaint over financial disclosures, questions the integrity of revenues that underpinned nearly the entirety of the company's consolidated sales between FY21 and FY25.
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SEBI appointed an investigating authority in October 2024 and subsequently engaged forensic auditor BDO to examine company records. What the probe revealed was stark: between 97% and 99% of Rajesh Exports' reported revenues were attributed to overseas subsidiaries. The most critical of these is Valcambi, its Switzerland-based refining unit and the group's primary operating arm. Yet Valcambi's actual revenues, as verified by the forensic auditor, fell far short of the figures reported at the consolidated level — producing what SEBI describes as a cumulative mismatch of Rs 15.15 lakh crore.
The probe ran into significant obstacles. The company allegedly failed to furnish key customer and vendor records, and financial statements of material subsidiaries were not disclosed. BDO's audit was therefore conducted under severe limitations, with SEBI flagging inconsistent submissions and active non-cooperation throughout the investigation.
The regulator's concerns extend beyond revenue figures. SEBI said it was unable to verify a claimed Rs 1,035 crore investment in an Africa-based gold mine — an asset that, if fictitious, would further inflate the company's stated asset base.
The interim order does not represent SEBI's final findings. Rajesh Exports and Mehta are entitled to respond before any conclusive determination is made. However, if the allegations are upheld, the company faces significant penalties, potential disgorgement of gains, and an extended ban from capital markets.
The investigation remains ongoing. The interim order marks a significant development in SEBI's ongoing probe and could have far-reaching implications for investor confidence and regulatory compliance standards in listed companies with extensive international operations.
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