How a shareholder's complaint led Sebi to Rajesh Exports' ₹15 trn puzzle
New Delhi, Jun 4, 2026
A shareholder's complaint about unpaid receivables triggered a two-year investigation that led Sebi to question revenues, disclosures and overseas operations at Rajesh Exports
On March 11, 2024, an email landed in the inbox of the Securities and Exchange Board of India (Sebi) against Rajesh Exports Limited (REL), one of India's largest gold companies. The sender was not a whistleblower, activist investor or former employee but a shareholder. The complaint focused on a seemingly technical issue: large trade receivables that had remained outstanding for years.
More than two years later, that complaint has culminated in a scathing interim order in which Sebi alleges that the company may have misrepresented revenues, failed to disclose key subsidiary information, diverted funds through entities connected to its promoter and obstructed attempts to verify a substantial part of its overseas operations.
How the case developed
March 11, 2024: Shareholder complaint received
October 23, 2024: Investigating authority appointed
December 3, 2024: BDO India Services appointed as forensic auditor
Throughout 2025: Multiple summons and information requests issued
June 3, 2026: Sebi issues interim order against Rajesh Exports and promoter Rajesh Mehta
Why did the probe begin to raise larger questions?
As the investigation progressed, Sebi asked for customer-wise sales data, vendor-wise purchase records, debtor and creditor details, subsidiary financial statements, transaction-level records, and supporting documents. It also sought access to accounting systems and books of accounts.
According to Sebi, many of these requests went unanswered or were only partially answered. The forensic auditor reported that it was not given access to enterprise resource planning systems, books of accounts, and journal dumps. It also said large portions of transaction samples could not be verified because supporting documentation was either incomplete or unavailable.
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.
At that point, the investigation moved beyond receivables and began examining whether the company's broader financial reporting could be independently verified.
The ₹15.15 trn puzzle: Why Swiss subsidiaries are central to the case
To understand Sebi's concerns, it is necessary to understand Rajesh Exports' overseas structure.
At the top sits Rajesh Exports Ltd in India. Below it is REL Singapore, a wholly owned subsidiary that the company described as a holding company without significant day-to-day operations. REL Singapore owns Global Gold Refineries AG (GGR), a Switzerland-based entity that Rajesh Exports described as another holding company. GGR in turn owns Valcambi SA, the Swiss refinery that the company has repeatedly described as the principal operating entity of the group.
According to Sebi, these overseas subsidiaries were not peripheral businesses and were effectively the entire group.
Rajesh Exports reported around ₹15.45 trillion of consolidated revenue between FY21 and FY25, of which about ₹15.18 trillion was attributed to subsidiaries and step-down subsidiaries. Sebi has alleged that approximately ₹15.15 trillion of that revenue was prima facie misrepresented.
Sebi compared those figures with the audited standalone financial statements of Valcambi SA.
According to the regulator, Valcambi reported annual revenues ranging from roughly ₹427 crore to ₹743 crore during the corresponding years. By contrast, GGR and Rajesh Exports reported revenues running into several trillion rupees, creating a major discrepancy.
Rajesh Exports told Sebi that Valcambi's standalone accounts reflected only processing charges and value-addition income, while GGR recognised the gross value of gold transactions. Sebi, however, said the company failed to provide sufficient documentation, accounting opinions, ownership records, reconciliation statements or transaction-level evidence to support this treatment.
The regulator, in its interim order, stresses that it is not merely that the numbers appear large, it is that the underlying revenues could not be independently verified despite repeated requests for evidence.
Based on its analysis, Sebi has alleged that approximately ₹15.15 trillion of revenue attributed to subsidiaries between FY21 and FY25 may have been misrepresented.
The Affluence puzzle
According to Sebi, Rajesh Exports recorded sales of about ₹11,487 crore and purchases of about ₹11,488 crore with Affluence Shares and Stocks Pvt Ltd between FY22 and FY24. These transactions accounted for around two-thirds of the company's standalone sales and purchases.
However, Sebi says Affluence informed that Rajesh Exports was never its client and that no such transactions had been executed with the company.
Instead, Affluence reportedly stated that it dealt only with promoter Rajesh Mehta in his personal capacity. According to Sebi's findings, Mehta traded gold derivatives through personal accounts and company funds were routed through him in connection with those activities.
The regulator has also alleged that ₹339 crore was transferred from Rajesh Exports to Rajesh Mehta, of which only ₹232 crore was returned. Sebi says these transfers lacked board approvals, audit committee approvals, and proper disclosures. The order also cites additional transactions involving Elese Pvt Ltd.
What does Rajesh Exports say?
Rajesh Exports has contested several of Sebi's observations. According to the order, the company argued that its standalone and consolidated financial statements were adequately disclosed and that subsidiary information could be derived from those disclosures. Sebi rejected that argument, saying disclosure of subsidiary financial statements is an independent legal requirement.
The company also cited Swiss confidentiality and data protection laws as a reason for not sharing certain information relating to overseas subsidiaries. Sebi said those arguments were misplaced and did not justify withholding information from Indian regulators.
Regarding revenue recognition, Rajesh Exports maintained that the accounting treatment reflected the nature of the gold refining business and the distinction between processing revenue and gross transaction values. Sebi has said the company failed to provide adequate supporting evidence for this explanation.
Rajesh Exports also told Sebi that it had intended to undertake digital gold trades through MCX, but because of ongoing litigation with the exchange, the trades were routed through promoter Rajesh Mehta's personal account. Rajesh Exports maintained that Mehta acted merely as a conduit and that the transactions were carried out on behalf of the company, which is why they were recorded in its books. Sebi, however, said the explanation was not supported by contemporaneous documentation, approvals or agreements.
The regulator said the company will have an opportunity to respond fully as the proceedings continue.
How significant is this case?
The case is among the most unusual accounting investigations seen in Indian capital markets in recent years. Several trade analysts on social media say the case carries significance because of the company's institutional shareholding. LIC held around 10.8 per cent of Rajesh Exports according to recent shareholding disclosures, making it one of the company's largest shareholders.
The allegations have also sparked debate online about whether reported revenues from Rajesh Exports may have influenced perceptions of India's export scale. However, neither Sebi nor any government agency has stated that India's official export statistics were overstated because of Rajesh Exports' reported revenues.
What happens next?
It is important to note that these are Sebi's prima facie findings in an interim order and not final conclusions.
The regulator has directed Rajesh Exports and Rajesh Mehta to cooperate with the investigation and with a fresh forensic audit. Rajesh Mehta has also been restrained from buying, selling or otherwise dealing in Rajesh Exports securities until further directions.
The next stage will involve:
- Responses from Rajesh Exports and Rajesh Mehta
- Additional forensic examination
- Review of subsidiary records
- Verification of transactions and disclosures
- Potential enforcement action if violations are ultimately established
For now, what began as a shareholder's complaint about old receivables has evolved into one of the largest and most consequential financial reporting investigations in recent Indian market history. Whether Sebi's allegations ultimately withstand scrutiny will be decided in the next phase of proceedings. But the journey from a single complaint to a ₹15.15 trillion revenue puzzle has already become a case study in how routine accounting red flags can lead regulators to much bigger questions.
The market reacted sharply to Sebi's order. Rajesh Exports shares hit the 5 per cent lower circuit on Thursday and closed at ₹104.65 on the BSE.
[The Business Standard]
