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Regulatory Action
On June 3, 2026, SEBI passed an interim ex-parte order against Rajesh Exports Limited (REL) and its promoter Rajesh Mehta. The order alleges one of the largest prima facie cases of financial misrepresentation in Indian capital market history. An estimated 99.80% of REL’s consolidated subsidiary revenues over five years were unverifiable or inflated. Rajesh Mehta has been barred from trading in REL’s securities. A fresh forensic audit has been ordered.
01Quick Snapshot: The Whole Story in 2 Minutes
Rs 15.15L Cr
Consolidated Subsidiary Revenue Prima Facie Misrepresented (FY21-FY25)
99.80%
Of Subsidiary Revenue Unverifiable vs Audited Valcambi Figures
Rs 12,557 Cr
Standalone Revenue Prima Facie Misrepresented (FY21-FY24, 64.53% of total)
Rs 2,914 Cr
Trade Receivables Adjusted Without Actual Cash Payments
Rs 338.90 Cr
Company Funds Transferred to Rajesh Mehta’s Personal Account (Gross)
~Rs 12,726 Cr
Estimated Erosion in Public Investor Wealth
Analysis: Understanding the Fraud Structure in Plain Language
Imagine a small grocery shop owner who tells his bank that he makes Rs 1 crore in sales every month. But when the bank checks the actual supplier invoices and cash receipts, real sales turn out to be just Rs 2,000 per month. The rest of the Rs 1 crore was never real. That, in essence, is what SEBI has prima facie found in Rajesh Exports.
REL is a gold refiner and jewellery company listed on BSE and NSE. Its India operations (standalone) generated sales of roughly Rs 2,000 to Rs 9,000 crore per year. But its consolidated revenue, which includes overseas subsidiaries, showed Rs 2.43 lakh crore to Rs 4.23 lakh crore per year. The difference is supposed to come from a Swiss subsidiary called Valcambi SA.
Here is the catch. Valcambi SA’s own KPMG-audited accounts show it earned only about Rs 427 to Rs 743 crore per year in revenue. That is less than 0.5% of what REL claimed in its consolidated statements. So where did the other 99.5% come from? REL consolidates accounts through another entity called GGR, which is an unaudited holding company. GGR had no real day-to-day business. Yet GGR’s unaudited figures showed revenues hundreds of times larger than Valcambi’s audited figures. REL used GGR’s inflated, unaudited numbers instead of Valcambi’s verified, audited ones to build its consolidated financials.
Think of it this way: your father earns Rs 5 lakh per year. You tell your friends that your family earns Rs 50 crore per year because you have a holding company that consolidates the family’s “potential wealth.” That potential wealth has no bills, no invoices, and no bank statements to back it up. That is the pattern SEBI has described here.
Beyond the consolidated problem, SEBI found three additional issues at the standalone level. First, REL booked Rs 11,487 crore in sales with a stock broker called Affluence Shares and Stocks. But Affluence told SEBI under oath it never dealt with REL at all. Those entries actually matched the personal gold derivatives trading done by Rajesh Mehta in his own account. Second, REL incorrectly booked Rs 867 crore of foreign exchange fluctuations as Revenue from Operations instead of as exchange gains or losses in the profit and loss account. Third, it booked Rs 204 crore of interest income from Fixed Deposits and Mutual Funds as Revenue from Operations instead of Other Income. Together, these three items inflated standalone revenues by Rs 12,557 crore, which was 64.53% of total standalone revenue for FY 2020-21 to FY 2023-24.
02Who is Rajesh Exports Limited?
Rajesh Exports Limited was incorporated on February 01, 1995. It is registered in Bangalore under CIN No. L36911KA1995PLC017077. It is a gold refiner and manufacturer of gold products. It exports products internationally and operates retail showrooms under the brand name SHUBH Jewellers in India. As of June 03, 2026, the company had a market capitalisation of approximately Rs 3,210 crore, with shares trading at Rs 108.70 (Face Value: Rs 1 per share) on BSE (Scrip Code: 531500) and NSE (Symbol: RAJESHEXPO).
The company has a layered global structure. The key entities are:
| Entity | Location | Role in Structure | Nature of Business |
|---|---|---|---|
| Rajesh Exports Ltd (REL) | India | Listed Parent Company | Gold refining, manufacturing, export, retail (SHUBH Jewellers) |
| REL Singapore Pte Ltd | Singapore | Wholly Owned Subsidiary of REL | Holding company; not engaged in any day-to-day business |
| Global Gold Refineries AG (GGR) | Switzerland | REL Singapore holds 95%, REL holds 5% | Holding company of Valcambi SA; not engaged in day-to-day operations |
| Valcambi SA | Switzerland | Wholly Owned Subsidiary of GGR | Precious metal refining; sale of branded gold bars to bullion banks, central banks, exchanges |
| Valcambi USA Inc | USA | Wholly Owned Subsidiary of Valcambi SA (dissolved December 2023) | Marketing Valcambi brand in North America |
| Bab AL Rayan Jewellery LLC | UAE | Wholly Owned Subsidiary of REL Singapore | Procuring scrap gold/gold dore bars and refining/manufacturing gold products for sale/export |
| ACC Energy Storage Pvt Ltd | India | Subsidiary of REL (stake reduced from 100% to 51.05% in FY 2024-25) | Research in Advanced Energy Storage Devices; operations yet to begin |
| Elest Pvt Ltd | India | Promoter-Controlled Entity (Rajesh Mehta and Prashant Mehta) | Manufacturing Lithium Ion Cells, Battery Packs and Electric Vehicles |
Key Context: During FY 2020-21 to FY 2024-25, more than 97% of REL’s total consolidated revenues were attributed to its subsidiaries and step-down subsidiaries. The principal operating entity among them was Valcambi SA in Switzerland. The reliability of those subsidiary revenues is the central question in SEBI’s order.
03The Consolidated Revenue Fraud: Rs 15,15,385 Crore Prima Facie Misrepresented
This is the most staggering part of the SEBI order. Over five years (FY 2020-21 to FY 2024-25), REL’s disclosed consolidated revenues from operations totalled approximately Rs 15,44,899 crore. The revenue attributed to subsidiaries and step-down subsidiaries over the same period was Rs 15,18,413 crore. SEBI cross-checked this against the only audited numbers available for the operating entity: Valcambi SA’s standalone financials, audited by KPMG Switzerland.
Note that Valcambi and GGR prepare their accounts on a calendar year basis (January to December). SEBI converted Valcambi’s revenues into Indian Rupees using the average INR/CHF exchange rate for each calendar year. The comparison table below follows SEBI’s own presentation in the order.
| FY (REL) / CY (Valcambi) | REL Consolidated Revenue (INR Cr) (A) | REL Standalone Revenue (INR Cr) (B) | Subsidiary Revenue (C = A-B) | Valcambi SA Revenue (INR Cr) (D) | Prima Facie Misrepresentation (E = C-D) | % Misrepresentation (E/C) |
|---|---|---|---|---|---|---|
| FY 2020-21 / CY 2020 | 2,58,306 | 2,060 | 2,56,245 | 586.11 | 2,55,659 | 99.77% |
| FY 2021-22 / CY 2021 | 2,43,128 | 6,237 | 2,36,891 | 728.82 | 2,36,163 | 99.69% |
| FY 2022-23 / CY 2022 | 3,39,690 | 5,762 | 3,33,928 | 743.14 | 3,33,185 | 99.78% |
| FY 2023-24 / CY 2023 | 2,80,676 | 5,401 | 2,75,276 | 542.68 | 2,74,733 | 99.80% |
| FY 2024-25 / CY 2024 | 4,23,099 | 7,027 | 4,16,072 | 426.63 | 4,15,646 | 99.90% |
| Total | 15,44,899 | 26,486 | 15,18,413 | 3,027.38 | 15,15,385 | 99.80% |
How Did REL Try to Justify the Numbers?
REL argued that Valcambi SA only booked “processing revenues” or “value addition” as income. It claimed the actual gross revenue from gold sales was recognised at the GGR level, since GGR consolidated the full market value of gold transactions.
SEBI’s Counter: GGR is, by REL’s own admission, a holding company not engaged in any day-to-day business activity. If GGR has no operations, how can it recognise hundreds of lakh crores in revenue? Further, GGR’s consolidated financials are unaudited. REL chose to use unaudited GGR figures in its own audited consolidated statements, while having access to Valcambi’s KPMG-audited figures showing far lower revenues. SEBI found this conceptually inconsistent and prima facie misleading.
Plain Language Example
Suppose a baking company (Valcambi) earns Rs 100 for baking a cake. It correctly books Rs 100 as its revenue. Now its parent holding company (GGR) says: “The customer paid Rs 5,000 for the entire cake order including raw materials we never owned.” GGR books Rs 5,000 in its unaudited books. REL then consolidates GGR’s Rs 5,000 figure into its own accounts, even though the only audited evidence is Rs 100. SEBI’s question is: where is the proof for the other Rs 4,900?
REL also argued it could not share subsidiary data because Swiss data protection laws (FADP) prohibited disclosure. SEBI examined the FADP and found that it protects personal data of individuals, not corporate financial data. Moreover, FADP itself provides exceptions for regulatory proceedings. REL could not furnish customer-wise sales data, invoices, purchase orders, shipping documents, or any other supporting evidence for the Rs 15 lakh crore claimed. SEBI sent summons multiple times. Even the CEO of Valcambi SA did not respond to SEBI’s queries.
04Standalone Revenue Misrepresentation: Rs 12,557 Crore Across Three Issues
At the standalone level, SEBI found three separate accounting problems that together inflated REL’s revenues by Rs 12,557 crore, which was 64.53% of REL’s total standalone revenue for FY 2020-21 to FY 2023-24.
| Standalone Issue | Nature of Misrepresentation | Amount (INR Cr) | Period |
|---|---|---|---|
| 1. Affluence Transactions | Personal derivative trades of promoter booked as company sales | 11,487 (sales) / 11,488 (purchases) | FY 2021-22 to FY 2023-24 |
| 2. Exchange Fluctuation | Foreign exchange fluctuations improperly booked as Revenue from Operations | 867 (revenue) / 716 (purchases) | FY 2020-21 to FY 2023-24 |
| 3. Interest Income | Interest on Fixed Deposits and Mutual Funds improperly booked as Revenue from Operations | 204 | FY 2020-21 to FY 2023-24 |
| Total Standalone Revenue Misrepresentation | ~12,557 (64.53% of total standalone revenue) | FY 2020-21 to FY 2023-24 |
Each of these three issues is explained in detail in the following sections.
05Issue 1: Rs 11,487 Crore in Fictitious Trades with Affluence Shares
Between FY 2021-22 and FY 2023-24, REL recorded Rs 11,487 crore in sales and Rs 11,488 crore in purchases with a single entity: Affluence Shares and Stocks Private Limited. These transactions represented 66.02% of REL’s standalone sales and 67.11% of REL’s standalone purchases during that period.
| FY | Total REL Sales (INR Cr) | Sales to Affluence (INR Cr) | % of Total Sales | Total REL Purchases (INR Cr) | Purchases from Affluence (INR Cr) | % of Total Purchases |
|---|---|---|---|---|---|---|
| FY 2021-22 | 6,237 | 4,625 | 74.17% | 6,118 | 4,627 | 75.62% |
| FY 2022-23 | 5,762 | 4,935 | 85.66% | 5,637 | 4,935 | 87.54% |
| FY 2023-24 | 5,401 | 1,926 | 35.67% | 5,364 | 1,927 | 35.92% |
| Total | 17,399 | 11,487 | 66.02% | 17,119 | 11,488 | 67.11% |
Notice something unusual. In genuine gold trading, there is always a meaningful price difference between buying and selling. Yet the sales to Affluence and purchases from Affluence are almost exactly equal every year, resulting in near-zero value addition.
| FY | Sales to Affluence (INR Cr) | Purchases from Affluence (INR Cr) | Difference (INR Cr) |
|---|---|---|---|
| FY 2021-22 | 4,625.32 | 4,626.67 | (1.35) |
| FY 2022-23 | 4,934.98 | 4,935.24 | (0.26) |
| FY 2023-24 | 1,926.29 | 1,926.51 | (0.22) |
| Total | 11,486.60 | 11,488.42 | (1.82) |
What Affluence Actually Is
Affluence is a SEBI-registered stock broker. Its own financial statements show an aggregate Revenue from Operations of only Rs 113.22 crore and aggregate Purchases of Stock-in-Trade of Rs 84.64 crore across FY 2021-22 to FY 2023-24. Its business was disclosed as financial advisory, brokerage and consultancy services. Yet REL claims it did Rs 11,487 crore in gold transactions with this broker. The scale mismatch alone raises serious concern.
When SEBI summoned Affluence, its promoter Mr. Dhiren Shah and other officials, in their depositions before SEBI on October 03, 2025, stated that Affluence had trading relations only with Mr. Rajesh Mehta in his personal capacity. Affluence confirmed it had never entered into any agreement or transactions with REL.
What SEBI Found: On examination of contract notes and the ledger of Mr. Rajesh Mehta in the books of Affluence, SEBI found that Mr. Rajesh Mehta traded in gold derivatives through Affluence on 102 trading days during FY 2021-22 to FY 2023-24. Mr. Rajesh Mehta made aggregate net payments of Rs 7.45 crore to Affluence and incurred aggregate net losses of Rs 3.50 crore. Affluence then refunded the net balance of Rs 3,94,35,510 to Mr. Rajesh Mehta, who in turn transferred Rs 3,91,07,478 back to REL. REL had initially transferred Rs 7,45,00,000 to Mr. Rajesh Mehta for these purposes. The 102 entries in REL’s ledger for Affluence substantially corresponded with these 102 days of personal derivative trading by Mr. Rajesh Mehta. All of it was recorded in REL’s books as if it were genuine gold sales and purchases with Affluence.
Plain Language Example
Imagine the company’s Executive Chairman bets Rs 7.45 crore of company money on gold futures in his personal trading account through a stock broker. He loses Rs 3.50 crore. The remaining Rs 3.91 crore comes back to the company. Now the company’s accountant records this entire episode as: “Sold gold worth Rs 4,625 crore to the stock broker. Bought gold worth Rs 4,627 crore from the same broker.” That is what SEBI says REL did across 102 trading days, except the transactions were multiplied into thousands of crores in the books of accounts.
REL later claimed in its response dated March 17, 2026 that the trades were conducted for and on behalf of REL through Mr. Rajesh Mehta acting as a conduit, because of litigation with MCX. SEBI rejected this argument, noting that no contemporaneous agreement, board approval, or audit committee approval existed to support this claim.
06Issue 2 and 3: Exchange Fluctuation and Interest Misclassified as Revenue
Foreign Exchange Fluctuations Booked as Revenue (Rs 867 Crore)
During FY 2020-21 to FY 2023-24, REL recorded foreign exchange fluctuations arising from revaluation of foreign currency debtors aggregating to Rs 866.60 crore as part of Revenue from Operations. Additionally, it recorded foreign exchange fluctuations arising from revaluation of foreign currency creditors aggregating to Rs 716.18 crore as part of Purchases.
| FY | REL Standalone Sales (INR Cr) | Exchange Fluctuation in Revenue (INR Cr) | % of Sales |
|---|---|---|---|
| FY 2020-21 | 2,060 | 149 | 7.22% |
| FY 2021-22 | 6,237 | 188 | 3.01% |
| FY 2022-23 | 5,762 | 467 | 8.10% |
| FY 2023-24 | 5,401 | 64 | 1.18% |
| Total | 19,459 | 867 | 4.45% |
Under Ind AS 21 (The Effects of Changes in Foreign Exchange Rates), exchange differences arising on settlement or translation of monetary items such as foreign currency receivables and payables must be recognised in profit or loss for the period in which they arise. They cannot be added to Revenue from Operations. REL routed these amounts through sales and purchase ledgers instead, thereby inflating both reported turnover and expenses.
Interest Income Booked as Revenue (Rs 204 Crore)
During the same period, REL recorded interest income on Fixed Deposits and Mutual Funds aggregating to Rs 204 crore as part of Revenue from Operations. REL argued that these deposits were maintained for margin purposes relating to buyers’ credit facilities for importing gold, and therefore the interest constituted operational income.
SEBI disagreed. Under Ind AS 115 (Revenue from Contracts with Customers), interest income does not arise from contracts with customers. It does not represent consideration for transfer of goods or services. Therefore, it cannot form part of Revenue from Operations. REL’s own accounting policies disclosed in its annual reports for FY 2020-21 to FY 2022-23 stated that interest income should be recognised under “Other Income.”
Combined Impact: Together, the exchange fluctuation issue (Rs 867 crore) and the interest income issue (Rs 204 crore) inflated standalone Revenue from Operations by Rs 1,070.60 crore for FY 2020-21 to FY 2023-24. Combined with the Affluence issue (Rs 11,487 crore), total standalone revenue misrepresentation reaches approximately Rs 12,557 crore, which is 64.53% of REL’s total standalone revenue for that period.
07Vanishing Receivables: Rs 2,914 Crore Adjusted Without Real Money
REL’s trade receivables on a standalone basis were massive and concentrated. About 98% to 99% of them were owed by just four overseas customers across FY 2021-22 to FY 2023-24.
| Debtor | FY 2021-22 (INR Cr) | FY 2022-23 (INR Cr) | FY 2023-24 (INR Cr) |
|---|---|---|---|
| AL Jameelat Jewellery LLC | 2,296.41 | 2,571.32 | 2,035.05 |
| Aurofin SA | 2,094.49 | 873.07 | 110.55 |
| ESG Edelmetall Handel GMBH and Co | 179.23 | 200.41 | 206.69 |
| AL Sultan Jewellery LLC | 286.51 | 311.40 | 120.54 |
| Total | 4,856.64 | 3,956.20 | 2,472.83 |
| % of Total Standalone Receivables | 99% | 99% | 98% |
These receivables fell significantly between FY 2021-22 and FY 2023-24. But no actual bank payments arrived. Instead, REL reduced these receivables by offsetting them against trade payables through netting arrangements. Rs 2,914.07 crore was reduced this way across four adjustments.
| Adjustment No. | Debtor (Amount Owed to REL) | Creditor (Amount REL Owed) | Settlement Date | Amount (INR Cr) |
|---|---|---|---|---|
| 1 | Al Jameelat Jewellery LLC | Valcambi SA | December 16, 2023 | 588.55 |
| 2 | Al Sultan Jewellery LLC | Basma Jewellery LLC | December 16, 2023 | 192.58 |
| 3 | Aurofin SA | Valcambi SA | December 16, 2023 | 765.88 |
| 4 | Aurofin SA | Aurofin SA | September 28, 2022 | 1,367.06 |
| Total | 2,914.07 | |||
Under Ind AS 1 and Ind AS 32, an entity can only net a financial asset against a financial liability when it has a legally enforceable right to set off the recognised amounts. REL had no formal contemporaneous agreements for Adjustments 1, 2 and 3. SEBI found that letters and documents submitted by REL appeared to have been obtained after the investigation began, not at the time of the actual adjustment.
For Adjustment 1 involving Al Jameelat, SEBI sent an email to the address used in REL’s KYC documents. The mail server replied that the email address was not configured to receive emails. KYC documents submitted had expired licences and name spelling mismatches.
For Adjustment 2 involving Al Sultan, the commercial licence submitted by REL corresponded to a different entity called Al Aziza Jewellery LLC, not Al Sultan Jewellery LLC.
Prima Facie Conclusion: REL reduced Rs 2,914.07 crore of long-outstanding foreign receivables through netting arrangements that had no contemporaneous legal basis, no adequate documentation, and involved counterparties whose very existence could not be independently verified.
08Funds Routed Through Promoter Accounts
Analysis of REL’s bank statements revealed substantial fund transfers from the company to its promoter and promoter-linked entities, without proper board approvals or related party disclosures.
Transactions with Rajesh Mehta (Promoter and Executive Chairman)
During April 01, 2020 to September 30, 2025, REL transferred funds aggregating to Rs 338.90 crore to Mr. Rajesh Mehta. Mr. Rajesh Mehta transferred Rs 232.44 crore back to REL. The net outflow was Rs 106.39 crore.
| Financial Year | REL to Rajesh Mehta (INR Cr) | Rajesh Mehta to REL (INR Cr) | Net Outflow / (Inflow) (INR Cr) |
|---|---|---|---|
| FY 2020-21 | 8.07 | 8.50 | (0.43) |
| FY 2021-22 | 180.35 | 89.46 | 90.89 |
| FY 2022-23 | 16.55 | 1.25 | 15.30 |
| FY 2023-24 | 1.01 | Nil | 1.01 |
| FY 2024-25 | 0.01 | 0.34 | (0.32) |
| FY 2025-26 | 132.91 | 132.90 | 0.01 |
| Total | 338.90 | 232.44 | 106.39 |
None of these transactions were disclosed as related party transactions in REL’s annual reports. None were placed before the Audit Committee for approval. As per REL’s annual reports, Mr. Rajesh Mehta attended all 51 Board meetings and all 21 Audit Committee meetings of REL across FY 2020-21 to FY 2024-25. SEBI notes that given his position as Executive Chairman and his attendance at every such meeting, the acts and omissions identified in this order could not prima facie have occurred without his knowledge, consent, involvement or acquiescence.
Transactions with Siddharth Mehta (Son of Rajesh Mehta)
Siddharth Mehta, son of Mr. Rajesh Mehta, is also a related party of REL. KMPs of REL stated in their depositions that Siddharth Mehta had no role in REL and did not receive monetary benefits. However, bank statements showed that during April 01, 2020 to September 30, 2025, REL transferred Rs 21.25 crore to Siddharth Mehta and Rs 5.79 crore was transferred back, resulting in a net outflow of Rs 15.46 crore. None of this was disclosed as a related party transaction or approved by the Board or Audit Committee.
Transactions with Elest Pvt Ltd (Promoter-Controlled Entity)
Elest Pvt Ltd was incorporated on October 26, 2020 by Mr. Rajesh Mehta and Mr. Prashant Mehta with a nominal capital of Rs 1 lakh. It is engaged in manufacturing Lithium Ion Cells and Electric Vehicles. REL transferred a total of Rs 565.88 crore to Elest between FY 2020-21 and FY 2025-26. Only Rs 350.03 crore came back. The net outflow was Rs 215.85 crore.
Board and Audit Committee minutes revealed approval only for an investment of Rs 200 crore in Elest and a loan of Rs 75.15 crore at 4.5% interest. The remaining transactions had no board approval. Suresh Gowda, Managing Director of REL, and Vijendra Rao, CFO of REL, stated in their depositions that they were unaware of banking transactions beyond the approved Rs 200 crore investment.
Cross-Holdings Concern: On January 01, 2025, REL acquired additional shares of ACC Energy Storage and simultaneously Elest subscribed to shares of ACC Energy, causing REL’s stake in ACC Energy to fall from 100% to 51.05%, with Elest’s stake rising to approximately 48.95%. Subsequently, ACC Energy invested Rs 262 crore in Elest during FY 2024-25. The MD and CFO of REL stated in their depositions that they were unaware of the Rs 147 crore investment by Elest in ACC Energy and the subsequent Rs 262 crore investment by ACC Energy in Elest. All decisions, it appears, were made solely by Rajesh Mehta.
09The Africa Gold Mine That Nobody Can Find
In FY 2022-23, REL’s consolidated balance sheet showed “Other Non-Current Investments” of Rs 1,035.27 crore. When the stock exchange asked what this represented, REL replied it was “Investment in Gold Mines in Africa.”
SEBI examined REL’s standalone financials, REL Singapore’s standalone financials, and GGR’s consolidated financials. No investment in gold mines in Africa appeared anywhere. GGR’s total consolidated non-current assets, which include the physical assets of Valcambi as its only operating entity, totalled Rs 413.26 crore as at December 31, 2022 and Rs 444.04 crore as at December 31, 2023. There is no trace of African gold mines in any of these statements.
When SEBI asked REL to explain, REL said it could not locate its earlier response and that investments “existed through foreign subsidiaries.” It provided no entity-wise breakup, no valuation report, and no reconciliation statement. By FY 2024-25, the same line item had grown to Rs 10,547.72 crore under “Other Non-Current Investments” in the consolidated balance sheet.
Prima Facie Finding: REL disclosed investments of Rs 1,035.27 crore in FY 2022-23 growing to Rs 10,547.72 crore in FY 2024-25 under “Other Non-Current Investments” in its consolidated balance sheet, without providing any supporting records, entity-wise breakup, or valuation basis that could be independently verified.
10Non-Cooperation: The Cover-Up Pattern
SEBI appointed BDO India Services Pvt Ltd as forensic auditor on December 03, 2024. The Forensic Audit Report was finalised on March 25, 2026, but it was prepared subject to several significant limitations because REL systematically obstructed the audit process.
- No ERP Access: REL did not provide the forensic auditor access to its Enterprise Resource Planning systems or books of accounts.
- Journal Dump Withheld: The complete journal dump, which records every accounting entry, was not provided.
- Swiss Subsidiary Data Refused: REL refused to share any data from GGR or Valcambi, citing Swiss data protection laws. SEBI found this defence inapplicable to corporate financial data and regulatory proceedings.
- Partial and Obscured Ledgers: Ledgers provided had narrations that were only partially visible. The ledger for Affluence in REL’s books did not contain corresponding ledger account names or sufficient particulars enabling independent verification.
- Negligible Purchase Documentation: Out of a purchase sample worth Rs 7,021.36 crore (Rs 6,876.04 crore from FY 2020-21 to FY 2023-24 plus Rs 145.32 crore from prior periods), complete documents were provided for only 4 sample purchases covering 2.03% of the total sample value.
- Incomplete Sales Documentation: Out of a sales sample worth Rs 12,217.15 crore (Rs 6,059.59 crore from FY 2020-21 to FY 2023-24 plus Rs 6,157.56 crore from prior periods), full documentation was received for only 30 sample sales covering 35.07% of the total sample value.
- Contradictory Submissions: REL furnished varying and inconsistent data for the same transactions at different stages of investigation. When SEBI pointed this out, REL asked SEBI to disregard all earlier submissions. SEBI rejected this, noting all submissions form part of the evidentiary record.
- Statutory Auditors Unresponsive: REL’s statutory auditors promised to furnish audit working papers during depositions in January 2026. None were delivered before the date of this order.
11What SEBI Has Ordered
SEBI passed this order in exercise of powers under Sections 11(1), 11(4) and 11B read with Section 19 of the SEBI Act, 1992. The following directions are in force until further orders:
1
Rajesh Mehta Restrained from Trading in REL Securities
Noticee No. 2 (Rajesh Mehta) is restrained from buying, selling or dealing in securities of Rajesh Exports Limited, either directly or indirectly, in any manner whatsoever, until further orders.
2
REL Directed to Make True and Fair Disclosures
REL must make true and fair disclosures of its financial statements, related party transactions and other disclosures as required under the LODR Regulations.
3
Full Cooperation with Investigating Authority
Both Noticees are directed to cooperate with SEBI’s Investigating Authority and provide all documents and explanations sought. Information detailed in Annexure-B of the order must be provided within 30 days.
4
New Forensic Audit Ordered
Since BDO India’s forensic audit was completed with severe limitations, the Investigating Authority is directed to appoint a new forensic auditor. Both Noticees must cooperate fully and provide all information sought by the new auditor.
5
Statutory Auditors Referred to NFRA
A copy of the order is forwarded to the National Financial Reporting Authority (NFRA) for appropriate action against REL’s statutory auditors, in view of their prima facie misconduct and dereliction of duties.
6
Right of Hearing Reserved
The Noticees have 21 days from the date of receipt of this order to file their reply or objections and to indicate whether they desire a personal hearing.
Regulations Prima Facie Violated
| Law / Regulation | Violations |
|---|---|
| PFUTP Regulations 3(b), 3(c), 3(d), 4(1), 4(2)(e), 4(2)(f), 4(2)(k), 4(2)(r) read with SEBI Act Sections 12A(a), 12A(b), 12A(c) | Fraudulent device, scheme and artifice to mislead and defraud investors; disseminating false and misleading financial information |
| LODR Regulations 4(1)(c), 4(1)(e), 4(1)(g), 4(1)(h), 4(1)(j) and 4(2)(e)(i) | Failure to ensure accuracy, completeness and transparency in disclosures to stock exchanges and investors |
| LODR Regulations 4(1)(a), 4(1)(b), 4(2)(e)(i), 33(1)(a), 33(1)(c) and Regulation 48 | Failure to comply with applicable Accounting Standards (Ind AS 1, 21, 24, 32, 107, 110, 115) |
| LODR Regulation 46(2)(s) and Companies Act Section 136(1) | Failure to upload audited financial statements of subsidiaries and step-down subsidiaries on website |
| LODR Regulation 23(2) | Related party transactions not placed before Audit Committee; prior approval not obtained |
| LODR Regulation 34(3) read with Clause 1 of Para A of Schedule V; Ind AS 24 Para 18 | Non-disclosure of related party transactions in annual reports |
| SEBI Act Sections 11(2)(ia) and 11C(3) | Non-cooperation with investigation; failure to provide information despite repeated summons |
| SEBI Act Section 11(2)(ia) | Providing contradictory and inconsistent information at different stages of investigation |
| SEBI Act Section 27 | Rajesh Mehta held personally liable for acts and omissions of REL as person in charge of its affairs |
12Impact on Investors
During April 01, 2020 to June 03, 2026, the share price of REL witnessed a significant rise followed by a steep decline. The share price reached a peak of Rs 1,028.40 on February 06, 2023. At that point, based on 29,52,59,959 outstanding shares, market capitalisation was approximately Rs 30,364.53 crore.
Subsequently, the share price declined sharply from June 2023 onwards, particularly after delays and non-disclosures in filing financial statements with stock exchanges, including non-filing of cash flow statements for FY 2022-23. By April 02, 2026, the share price had fallen to Rs 80.11, reducing market capitalisation to approximately Rs 2,365.33 crore.
That represents an erosion of approximately Rs 27,999.21 crore from the peak market capitalisation. Considering the public shareholding in REL, this erosion resulted in an estimated public investor wealth loss of approximately Rs 12,725.53 crore.
Additionally, the number of shareholders grew from 22,472 in March 2020 to 2,06,942 by September 2025. This means over two lakh investors were holding shares during the period when SEBI says the financial statements were materially misleading.
Important Reminder: This is an interim order based on prima facie findings. It is not a final adjudication. REL and Rajesh Mehta have the right to respond and seek a hearing within 21 days. The investigation is ongoing. SEBI itself notes that the precise extent to which the share price decline is attributable to the matters under investigation would require detailed examination.
Frequently Asked Questions
No. An interim order is a preventive step taken while the investigation is still ongoing. It is not a final finding of guilt or conviction. SEBI passes interim orders when it believes urgent action is needed to protect investors or prevent destruction of evidence. REL and Rajesh Mehta have 21 days from receipt of this order to file their reply and contest the findings before a final order is passed.
“Prima facie” means “at first sight” or “on the face of available evidence.” It indicates that based on evidence gathered so far, there appears to be a violation. It is not a final proven conclusion. Courts and regulators use this phrase to show that while they have sufficient grounds to act, the matter has not yet been fully adjudicated.
Yes. The interim order does not ban trading in REL shares by the general public or ordinary investors. Only Rajesh Mehta has been personally restrained from buying or selling REL securities directly or indirectly. However, investors should factor in the significant regulatory uncertainty this order creates before making any investment decision.
The National Financial Reporting Authority (NFRA) is the independent regulator for auditors of listed companies in India. SEBI has forwarded the order to NFRA because REL’s statutory auditors failed to flag material discrepancies in the financial statements and also failed to submit audit working papers despite promising to do so during depositions in January 2026. NFRA will decide independently whether the statutory auditors should face disciplinary action.
Nothing in SEBI’s order says Valcambi SA is itself engaged in fraud. Valcambi is a legitimate Swiss precious metals refinery with KPMG-audited financials. SEBI’s concern is that Valcambi’s audited revenues are negligible compared to what REL consolidated in its group accounts. SEBI’s prima facie finding is that the inflated figures were created at the consolidation level through GGR’s unaudited books, not at Valcambi itself.
This is not investment advice. However, investors should note that this is an ongoing investigation with significant prima facie findings. SEBI has ordered a fresh forensic audit. The outcome of that audit and any subsequent proceedings could have a material impact on the company. Investors are advised to read the full SEBI order (Order No. WTM/KV/CFID/CFID-SEC6/32431/2026-27) and consult a SEBI-registered investment advisor before making any decision.
Our Take: The Rajesh Exports case is a sobering reminder that consolidated financial statements are only as reliable as the underlying data from subsidiaries. When more than 99% of your group revenue sits inside Swiss entities that refuse to share data with regulators, investors are essentially flying blind. Whatever the final outcome of this case, one lesson is already clear: before investing in any company with large overseas subsidiaries, always verify whether subsidiary-level financials are separately published and audited on the company’s website, as mandated by law. If they are missing, that gap itself is a warning signal worth taking very seriously.
