SEBI Alleges Massive Financial Misrepresentation at Rajesh Exports; Company and Promoter Barred from Securities Market

SEBI, India’s capital markets regulator, has alleged that Rajesh Exports carried out one of the biggest acts of financial misrepresentation in recent memory. On June 3, 2026, the regulator stated that the company reported nearly ₹15.15 trillion ($158.3 billion) more in revenue than it had actually earned, allegedly inflating these figures through obscure overseas entities. As a result, SEBI has barred Rajesh Exports and its chairman, Rajesh Mehta, from participating in the securities market until the investigation is completed.

The regulator highlighted serious concerns regarding financial transparency, corporate governance, and investor protection. The case has raised significant questions surrounding these crucial aspects within the company.

Overseas Subsidiaries at the Center of the Investigation

SEBI alleged that Rajesh Exports derived between 97% and 99% of its revenue from overseas entities, particularly Valcambi SA in Switzerland, a major precious-metals refiner. However, the company allegedly failed to publicly disclose the financial details of these foreign subsidiaries as required under regulations.

What further raised concerns was that, despite Valcambi appearing to be a crucial contributor to revenues, its own reports reflected very limited actual income. Upon deeper investigation, SEBI alleged that Rajesh Exports misrepresented nearly ₹15.15 trillion in revenue from these subsidiaries between FY2020-21 and FY2024-25. According to the regulator, this figure accounted for almost 99.8% of the subsidiary-generated revenue.

Questionable Transactions and Alleged Turnover Inflation

The investigation also uncovered unusual transactions involving Affluence Shares and Stocks Private Limited. Rajesh Exports reportedly recorded ₹114.87 billion in sales and ₹114.88 billion in purchases involving the firm. However, Affluence allegedly denied that such transactions had taken place.

SEBI believes these transactions were not genuine business activities. The regulator alleged that the company inserted these figures into its books merely to inflate turnover numbers. According to SEBI, these transactions were connected to the trading activities of promoter Rajesh Mehta rather than legitimate commercial operations.

If proven, these allegations would constitute serious violations of financial disclosure norms and could have misled investors regarding the company’s actual business performance.

Alleged Diversion of Company Funds

SEBI further accused Rajesh Exports of diverting ₹3.39 billion to the personal bank accounts of Rajesh Mehta, with some of the funds allegedly being used for derivative trading activities.

The regulator emphasized that these transactions were neither approved by the board of directors nor by the audit committee. Additionally, SEBI stated that the transactions were not disclosed as related-party dealings, as required under regulatory norms.

According to the investigation, a total of ₹9.26 billion allegedly moved through various channels without proper approvals or disclosures. Consequently, SEBI has decided to appoint a forensic auditor for a detailed examination of the company’s financial records. The regulator has also referred the matter to the National Financial Reporting Authority (NFRA) to examine possible audit-related irregularities.

Impact on Investors

One of the most significant aspects of SEBI’s order concerns the alleged losses suffered by investors. According to the regulator, shareholders — many of them retail investors — may have lost nearly ₹127.26 billion due to alleged financial misstatements and diversion of funds.

The case highlights the risks faced by investors when corporate financial disclosures are allegedly manipulated. Market experts have emphasized that transparent reporting standards and strong corporate governance mechanisms are essential for maintaining investor confidence in listed companies.

The allegations against Rajesh Exports represent one of the largest suspected financial misreporting cases investigated by SEBI in recent years. The regulator has pointed to signs of revenue inflation, inadequate disclosure of subsidiary operations, questionable transactions, and possible diversion of corporate funds.

Although the investigation remains ongoing and the allegations are yet to be tested through the full regulatory and legal process, the case underscores the importance of strict disclosure standards, independent audits, and robust corporate governance practices.

SEBI’s findings are expected to attract close scrutiny from investors, regulators, and corporate India, given their potential implications for market integrity and investor protection.