Rajesh Exports: How did a Rs 15.15 lakh crore revenue discrepancy become India’s biggest market mystery?

SEBI’s interim ban on Rajesh Exports over alleged Rs 15.15 lakh crore revenue mismatch has shaken markets, triggering questions on audits, overseas subsidiaries and corporate governance practices.

New Delhi: Markets regulator SEBI has barred Rajesh Exports and its promoter-chairman Rajesh Mehta from accessing the securities market following serious allegations of financial misrepresentation. The interim order, issued on June 3, has placed the Bengaluru-based gold and jewellery company under intense regulatory scrutiny.

The regulator has alleged that the company overstated revenues by an estimated Rs 15.15 lakh crore over a five-year period, a figure that far exceeds the economic output of several nations combined.

Complaint Triggered Multi-Agency Probe

The case began with a shareholder complaint in March 2024, flagging unusually high trade receivables that remained unpaid for extended periods. The complaint led SEBI to launch a detailed investigation, followed by the appointment of a forensic auditor to examine the company’s financial records and overseas operations.

Authorities later expanded the probe to include subsidiary-level transactions and consolidated financial statements.

Discrepancies in Overseas Subsidiary Revenues

A major portion of Rajesh Exports’ reported earnings came from its foreign subsidiaries, particularly Switzerland-based Valcambi SA, which plays a key role in its global operations.

However, auditors reportedly found significant gaps between declared consolidated revenues and figures verified from subsidiary records. SEBI has claimed that nearly all reported revenues during FY21 to FY25 could not be fully substantiated, leading to the alleged Rs 15.15 lakh crore discrepancy.

Missing Records and Verification Challenges

The investigation faced hurdles as key documents, including customer data, vendor records and subsidiary financial statements, were reportedly not fully provided. SEBI noted that incomplete cooperation limited the auditor’s ability to independently verify several transactions.

Questions Over African Investment and Transactions

The regulator also raised concerns about a reported Rs 1,035 crore investment in African gold mining assets, citing insufficient documentation and valuation support.

In another instance, transactions worth over Rs 11,000 crore involving Affluence Shares and Stocks Pvt. Ltd. were disputed, with the counterparty denying any business relationship with the company.

Fund Transfers and Related-Party Concerns

SEBI further alleged that company funds were diverted to accounts linked to promoter Rajesh Mehta and used for personal derivative trading. Some transactions were not disclosed as related-party dealings, raising additional governance concerns.

Investor Wealth and Market Impact

The case has already affected investor sentiment, with shares of Rajesh Exports falling sharply following the order. The stock has lost over 80% of its value in the past three years.

Large institutional investors, including LIC, hold significant stakes, increasing broader market exposure to the unfolding controversy.

Company Under Interim Ban, Final Order Awaited

SEBI’s action remains interim, and the company has been given an opportunity to respond to the allegations. Final conclusions will depend on further investigation and regulatory hearings.

If proven, the case could become one of the most significant corporate governance scandals in India’s listed market history.