The financial markets were taken by surprise after the Securities and Exchange Board of India (SEBI) alleged that Rajesh Exports had significantly overstated its revenues over several financial years. The regulator’s interim findings suggest that the company may have reported inflated figures amounting to nearly Rs 15.15 lakh crore between FY2020-21 and FY2024-25, raising serious concerns about the accuracy of its financial disclosures.
Based on SEBI’s preliminary investigation, a substantial portion of the revenue attributed to the company’s overseas operations appears to have been inaccurately represented. The regulator noted that almost the entire revenue reported through foreign subsidiaries may not reflect the actual business activity carried out during the period under review.
As part of its interim action, SEBI has restricted Rajesh Exports and its founder and executive chairman, Rajesh Mehta, from participating in the securities market until further notice. The order stems from findings that indicate a possible pattern of revenue misreporting and financial irregularities spanning several years.
Investigators also pointed to concerns regarding the company’s Swiss subsidiary, Valcambi SA. While Rajesh Exports projected the unit as a major contributor to its global business operations, audited financial records reportedly showed revenue levels that were only a fraction of the amounts reflected in the consolidated statements. This discrepancy became a key focus of SEBI’s examination.
The market regulator further alleged that thousands of crores worth of sales and purchase transactions lacked genuine commercial substance. According to the order, these transactions were linked to gold derivative trades conducted by Rajesh Mehta in his personal capacity and were subsequently reflected in the company’s books, creating an appearance of business activity that may not have actually occurred.
The scale of the alleged discrepancies has sparked intense discussion among market participants and analysts. Ritesh Jain, founder of US-based investment research firm Pinetree Macro, publicly questioned how such massive figures could emerge without impacting broader economic and trade statistics. Reacting to reports highlighting the magnitude of the alleged misstatements, Jain raised concerns about whether such numbers should have been visible in larger macroeconomic data sets.
SEBI also observed that audited financial statements of Valcambi SA were not made readily available on the company’s website, which, according to the regulator, may have prevented investors from obtaining a clear understanding of the subsidiary’s actual financial performance.
Rajesh Exports, however, has strongly disputed the regulator’s conclusions. In a stock exchange filing issued on June 4, the company emphasized that the order remains interim in nature and does not establish any final wrongdoing. The company maintained that its financial reporting is accurate and argued that the discrepancy highlighted by SEBI arose from a misunderstanding of Valcambi’s financial metrics.
According to Rajesh Exports, the regulator allegedly compared the subsidiary’s EBITDA figures with revenue data, leading to what the company describes as an incorrect assessment of the reported numbers. The company reiterated that it has complied with applicable requirements and expressed confidence that its position will be validated as the matter progresses.