For nearly three decades, Rajesh Exports was the kind of Indian success story that textbooks are made of. A small family jewellery business from Bengaluru — founded by brothers Rajesh and Prashanth Mehta — that grew into a global gold empire. A company that once claimed to process 35% of all the gold produced in the world. The owner of Valcambi SA, said to be the world's largest gold refinery, sitting in the Swiss town of Balerna. A name that inspired countless entrepreneurs.
And then, on June 2, 2026, SEBI dropped an interim order that shook markets and stunned investors.
The allegation? That ₹15.15 lakh crore — that's ₹15,15,000 crore, or roughly $180 billion — in revenues reported by Rajesh Exports over five years could not be independently verified. That the numbers, in SEBI's own words, appear to be "egregious and unheard of" misrepresentations. That corporate money may have been routed through the personal bank accounts of the promoter-chairman himself.
Rajesh Exports' shares hit the lower circuit. LIC — which holds 10.8% of the company using policyholders' money — found its stake value nearly halved. And retail investors, many of whom had held on through a brutal 80% multi-year decline, were left with nothing but questions.
This is the story of how SEBI found the hole — and what it means for Indian markets.
The Company That Was "Too Big to Question"
To understand the scandal, you first need to understand the mythology around Rajesh Exports.
Rajesh Exports Limited (REL) was incorporated in 1995 and quickly grew into one of the largest gold processors in India. By the mid-2010s, it was reporting revenues in the range of ₹40,000–80,000 crore per quarter — numbers that dwarfed most Indian companies. The company claimed to be the only firm in the world with a presence across the entire gold value chain, from refining raw ore to retailing finished jewellery.
The crown jewel of this empire was the 2015 acquisition of Valcambi SA — a Switzerland-based gold refinery with a history dating back to 1961. Valcambi was, and remains, one of the world's most reputed precious metals refiners. For Rajesh Mehta to bring Valcambi into an Indian company's fold was genuinely impressive. It made global headlines. It was precisely the kind of move that gave REL's enormous revenue numbers an aura of credibility.
The ownership structure was layered: Valcambi is owned by European Gold Refineries, which is owned by Global Gold Refineries AG (GGR), which is 95% owned by REL Singapore PTE Ltd. and 5% directly by Rajesh Exports Limited India. In other words, Valcambi was 100% controlled by Rajesh Exports — just at the end of a long chain of entities spanning India, Singapore, and Switzerland.
For years, analysts who questioned the quality of REL's reported numbers were brushed aside. The revenues were staggering, but gold is a commodity business with paper-thin margins — the logic was that you needed enormous volume to generate even modest profits. And Rajesh Exports, with Valcambi and its claimed 35% share of global gold production, had the volume story.
Or so everyone believed.
How It Started: One Complaint About Overdue Receivables
The unravelling began with something almost mundane: in March 2024, SEBI received representations flagging unusually large trade receivables that had remained outstanding for more than two years.
Trade receivables are amounts a company is owed by its customers after delivering goods or services — essentially money that hasn't been collected yet. In most businesses, receivables are collected within weeks or a few months. Receivables sitting unpaid for two or more years are a serious red flag, often indicating that the underlying sales may not have been genuine transactions.
SEBI appointed an investigating authority in October 2024 and subsequently commissioned a forensic audit, engaging BDO — one of the world's top-10 accounting firms — to examine Rajesh Exports' financial disclosures.
What investigators found when they began pulling on that thread defied comprehension.
The ₹15.15 Lakh Crore Gap — What SEBI Actually Found
Here is the core of SEBI's allegation, stripped to its essentials.
Between FY21 (2020–21) and FY25 (2024–25), Rajesh Exports reported consolidated revenues that investigators could not independently verify. The gap between revenues reported at the group level and what could actually be substantiated from underlying subsidiary records amounted to ₹15.15 lakh crore over five years.
To contextualise that number: ₹15 lakh crore is roughly equivalent to 20% of India's annual total export value. It is larger than the GDP of many countries. It is, by any measure, an extraordinary figure to be unverifiable.
Here is the specific discrepancy that SEBI highlighted as most stark:
SEBI noted that Valcambi's independently reported revenues accounted for less than 0.5% of the consolidated revenues of Rajesh Exports and its Swiss holding entity, Global Gold Refineries AG.
Think about what that means. Valcambi — the world-famous Swiss refinery that was supposed to be the engine of REL's global gold business — reported revenues of approximately ₹543 crore in its own independently audited accounts. But Global Gold Refineries AG, the holding company sitting directly above Valcambi, reported revenues of nearly ₹3 lakh crore.
The same physical gold refinery. The same operations. A revenue gap of over 550 times.
When auditors attempted to verify these figures against subsidiary-level records, they found the numbers did not match up. SEBI alleged these entries were non-genuine and were linked to Mehta's personal derivative trades, serving to artificially inflate the company's reported revenues.
SEBI's own language in the interim order was unusually blunt for a regulator: it described the discrepancies as "egregious and unheard of."
The Wall of Non-Cooperation
SEBI's concerns did not stop at the numbers themselves. A recurring and damning theme throughout the interim order is the alleged stonewalling of investigators.
SEBI's interim order states that out of transaction samples worth more than ₹7,000 crore, complete supporting documentation was provided for only a small fraction of the value examined.
Investigators also complained of being denied meaningful access to enterprise resource planning systems and primary accounting records necessary to independently verify transactions. The company, according to the order, cited Swiss data protection laws and confidentiality obligations as reasons for withholding information relating to foreign subsidiaries.
SEBI didn't accept that defence. The regulator stated unequivocally that a listed company operating in Indian capital markets cannot hide behind foreign privacy provisions — especially protections that were designed for individuals, not corporations — to defeat statutory disclosure requirements under Indian securities law.
The regulator further alleged that even where accounting ledgers were eventually provided, the records were incomplete and insufficient for forensic verification.
The Personal Bank Account Allegations
Among the most serious specific allegations in the order is one that cuts to the heart of corporate governance: the alleged routing of company funds through the personal bank accounts of promoter-chairman Rajesh Mehta.
The regulator cited correspondence in which the company allegedly admitted that certain funds had been routed through Mehta's personal account "without revealing the bank account from which the funds had come". SEBI interpreted this explanation as evidence of intentional obscuring of transaction trails and layering of financial transactions.
The regulator has flagged alleged transfers of company money through the personal bank accounts of Rajesh Mehta and Siddharth Mehta without the disclosures, approvals or related-party transaction procedures typically required under corporate governance norms.
Routing corporate funds through personal accounts — regardless of the stated purpose — is a textbook red flag for financial fraud investigations globally. It complicates the audit trail, makes it harder to trace where money originated and where it ultimately ended up, and bypasses corporate governance safeguards.
The African Gold Mines That No One Could Find
There is another specific allegation buried in the SEBI order that deserves attention.
The interim order additionally questioned a reported investment in African gold mining assets, stating that investigators were unable to independently verify aspects of the transaction based on the financial information available.
According to the regulator, the company failed to furnish adequate documentation supporting the existence, ownership and valuation of these investments. SEBI was not provided entity-wise breakups, valuation reports, reconciliation statements or other records that would normally substantiate such significant investments.
The alleged investment was approximately ₹1,035 crore. In the world of a company reporting ₹3 lakh crore in quarterly revenues, ₹1,035 crore might sound modest. But for an investment of that size, the complete absence of basic documentation — valuation reports, ownership certificates, reconciliation statements — is deeply concerning.
The Phantom Customer: Affluence Shares and Stocks
One of the most striking specific allegations in SEBI's order concerns transactions with an entity called Affluence Shares and Stocks Pvt Ltd.
REL reportedly recorded sales and purchases exceeding ₹11,000 crore with the entity. However, according to SEBI, Affluence claimed that Rajesh Exports was not their client. This contradiction is stark.
A company recording over ₹11,000 crore in transactions with a counterparty — and that counterparty saying the business relationship simply didn't exist — is, if accurate, among the clearest illustrations of why SEBI's broader revenue verification concerns cannot be dismissed.
The Market Reaction: Shares Collapse, LIC Caught Holding
Within hours of SEBI's interim report being published on June 2, 2026, panic swept the markets. Shareholders watched their money disappear as Rajesh Exports shares hit the lower circuit, tumbling 5% in one morning.
The stock hit the lower circuit at ₹103.92, extending a decline that has seen the stock lose more than 80% of its value over the past three years.
But the institutional fallout is arguably the bigger story.
LIC, which held a 10.8 per cent stake in Rajesh Exports as of March 2026, remains the company's largest public shareholder. The insurer's continued exposure to the jewellery exporter despite the stock's prolonged decline and growing regulatory concerns has drawn criticism from governance experts and investors.
LIC's stake, valued at approximately ₹637 crore at the beginning of 2026, is now worth around ₹347 crore. Similarly, the value of FII investments has fallen from about ₹838 crore to ₹456 crore.
LIC's 10.8% stake represents policyholders' money — ordinary Indians who pay premiums trusting that their insurer will invest wisely. The fact that LIC had not reduced its position since at least September 2023, through a multi-year collapse in the stock and growing regulatory scrutiny, has raised uncomfortable questions.
Shriram Subramanian, founder and managing director of InGovern Research Services, said: "LIC owes a huge responsibility to its policyholders. It should undertake rigorous forensic accounting and due diligence before making investments so that companies with fictitious revenues can be identified at an early stage."
Prominent domestic brokerages including Angel One and Univest issued morning notes advising investors to avoid bottom-fishing or average-buying into Rajesh Exports strictly.
What SEBI Has Ordered — and What Happens Next
This is an interim order, not a final verdict. That distinction matters legally. Rajesh Exports and Rajesh Mehta retain the right to present their defence.
Here is what SEBI has directed:
- Rajesh Mehta is barred from buying, selling or otherwise dealing in Rajesh Exports securities until further orders
- A fresh forensic audit has been ordered, to be conducted by a new forensic auditor appointed by SEBI
- Rajesh Exports and Mehta must submit all sought documents and explanations within 30 days
- The interim investigation by BDO will be complemented by the new forensic examination
Mehta's public response has been brief but absolute. "It is an interim order and nothing in it is true," he said on June 3. "We are going through the findings and will share a detailed statement."
Rajesh Exports, in its clarification, stated: "The order is interim and there has been no adverse conclusion on any aspect arrived at by SEBI. The revenues declared by the company are correct and there is no overstating of revenues." The company added it is in the process of submitting all required documents to SEBI.
The Bigger Picture: What This Case Tells Us About Indian Markets
Whether or not SEBI's prima facie findings are ultimately upheld, this case has already exposed several structural vulnerabilities worth naming clearly.
The auditor problem: For years, Rajesh Exports' statutory auditors signed off on accounts that, if SEBI's allegations are correct, contained fabricated revenues at a scale almost impossible to imagine. This raises fundamental questions about audit quality, auditor independence, and whether annual statutory audits — as currently structured in India — are sufficient to catch large-scale financial misrepresentation in companies with complex overseas subsidiary structures.
The subsidiary disclosure gap: The company allegedly failed to disclose the financial statements of its subsidiaries in the public domain on a consistent basis. If a company's revenues are 97–99% generated by overseas subsidiaries, and those subsidiary accounts are not publicly disclosed, investors have no independent way to verify the numbers. This is a systemic disclosure failure that SEBI may now address more broadly.
The institutional investor due diligence question: LIC's continued holding — backed by policyholders' money — through an 80% stock decline and growing regulatory red flags demands a serious internal review. Governance experts have been clear that institutions managing public savings cannot simply wait for a regulator to act.
The gatekeepers' failure: Auditors, investment banks, credit rating agencies, and institutional investors — all were part of the ecosystem that allowed this scale of alleged misrepresentation to persist for years. SEBI's order should prompt every gatekeeper in the Indian capital markets ecosystem to ask whether their own due diligence frameworks are adequate.
What Should Retail Investors Do Now?
For existing Rajesh Exports shareholders, this is an extraordinarily difficult situation.
The stock has already lost over 80% of its value from peak levels. At ₹103–104, buying more ("averaging down") based on hopes that the SEBI order will be overturned in the company's favour is extremely high-risk — this is not a case of temporary bad news or one bad quarter. This is a systemic allegation about the authenticity of the company's core revenues.
The prudent approach — as multiple brokerages have noted — is to wait for the outcome of the new forensic audit and SEBI's final conclusions before making any decisions. There is no urgency to average down into an investigation of this scale and nature.
For the broader market, this case is a reminder of due diligence basics: unusually large revenues with disproportionately small profits, complex overseas subsidiary structures, delayed receivables, and persistent declines in share price over multiple years — these are signals worth taking seriously, even when the surface story sounds impressive.
Timeline of Events
|
Date |
Event |
|
2015 |
Rajesh Exports acquires Valcambi SA, Switzerland's gold refinery |
|
March 2024 |
SEBI receives complaint about unusually large overdue receivables |
|
October 2024 |
SEBI initiates formal investigation; appoints investigating authority |
|
Late 2024–Early 2026 |
BDO forensic audit commissioned; company allegedly fails to cooperate |
|
June 2, 2026 |
SEBI publishes interim order; alleges ₹15.15 lakh crore revenue misrepresentation |
|
June 3, 2026 |
Rajesh Exports shares hit lower circuit; Rajesh Mehta denies all allegations |
|
June 4–5, 2026 |
LIC stake under scrutiny; brokerages caution against bottom-fishing |
|
30-day deadline |
Company and Mehta must submit all documents and explanations to SEBI |
|
TBD |
New forensic auditor appointed; final SEBI conclusions to follow |
Disclaimer: This blog is for informational and educational purposes only. It is based on SEBI's interim order and publicly available reporting as of June 5, 2026. SEBI's findings are prima facie and interim — not final conclusions. Rajesh Exports and Rajesh Mehta retain the right to present their defence. Nothing in this article constitutes investment advice. Please consult a SEBI-registered financial adviser before making investment decisions.
Frequently Asked Questions (FAQs)
Q1. What is the SEBI Rajesh Exports case about?
SEBI issued an interim order on June 2, 2026, alleging that Rajesh Exports Limited (REL) misrepresented approximately ₹15.15 lakh crore in revenues over five financial years (FY21–FY25). The regulator claims that revenues reported at the consolidated group level could not be independently verified against the records of the company's actual operating subsidiaries — primarily Valcambi SA, the Swiss gold refinery. SEBI has also alleged that company funds were routed through the personal bank accounts of promoter-chairman Rajesh Mehta.
Q2. What is the ₹15.15 lakh crore revenue hole?
SEBI's forensic investigators found a massive discrepancy between revenues reported by Rajesh Exports at the consolidated level and revenues that could be verified from underlying subsidiary records. Over five years, this gap amounted to ₹15.15 lakh crore. To illustrate the scale: Valcambi SA — supposed to be the group's main revenue generator — reported revenues of ₹543 crore in its own accounts, while the holding entity above it reported nearly ₹3 lakh crore. SEBI alleges these unverifiable revenues were non-genuine entries.
Q3. What is Valcambi SA and why is it central to this case?
Valcambi SA is one of the world's most reputed gold refineries, located in Balerna, Switzerland. Rajesh Exports acquired it in 2015. It sits at the bottom of a chain of holding companies that Rajesh Exports controls through its Singapore subsidiary. Because Valcambi was presented as the principal revenue-generating entity of the REL group, but its independently audited revenues were only a fraction of the group's reported consolidated revenues, it became the central point of contradiction in SEBI's investigation.
Q4. What action has SEBI taken?
SEBI's interim order bars Rajesh Mehta from buying, selling, or dealing in Rajesh Exports securities. A fresh forensic audit has been ordered with a new auditor. The company and Mehta must submit all sought documents and explanations within 30 days. These are interim measures — the final outcome will follow after the forensic audit and SEBI's full investigation.
Q5. Is this a final verdict or an interim order?
This is an interim order — SEBI's preliminary findings based on the investigation conducted so far. It is not a final conviction or conclusion. Rajesh Exports and Rajesh Mehta retain the legal right to present their defence. The regulator will issue final findings after completing the fresh forensic audit and reviewing all submissions.