India regulator accuses Rajesh Exports of inflating revenue through offshore entities

India’s markets regulator accused Rajesh Exports of using offshore entities and dubious transactions to inflate its revenue by 15.15 trillion rupees, a case that goes to the core of investor trust in one of the country’s best-known exporters. In a 109-page interim order issued by SEBI Whole Time Member Kamlesh Chandra Varshney, the regulator barred the company and its owner, Rajesh Mehta, from the securities markets while the investigation continues.

The order says 97% to 99% of Rajesh Exports’ consolidated revenue came from overseas subsidiaries, especially Switzerland-based Valcambi SA, even though those entities were not fully disclosed in the public domain. SEBI said Valcambi was presented as the group’s principal operating business despite standalone audited revenue that was negligible, giving investors the impression of a far larger operation than the filings supported. Separate reporting said the regulator alleged standalone revenue misrepresentation of about 12,557 crore rupees during FY21 through FY24, and that the alleged 15.15 trillion rupees in inflated revenue amounted to about 99.8% of subsidiary revenue over FY21 through FY25.

SEBI also alleged that Rajesh Exports booked 114.87 billion rupees in sales and 114.88 billion rupees in purchases with Affluence Shares and Stocks Private Limited, even though the firm denied the transactions. The regulator said those entries were non-genuine and tied to Mehta’s personal derivative trades, part of a pattern that used company books to create turnover without corresponding economic activity. SEBI further alleged that 3.39 billion rupees of company funds were routed into Mehta’s personal accounts for derivative trading without board or audit committee approval and without proper related-party disclosures, while a total of 9.26 billion rupees was routed without approvals or disclosures.

The case began with a shareholder complaint in March 2024 over large outstanding trade receivables, and SEBI appointed BDO India Services Pvt Ltd as forensic auditor to review the company’s books and records. Rajesh Exports, long marketed as a major gold refiner and exporter and one of India’s largest private-sector gems and jewellery companies, now faces questions that extend beyond one balance sheet. If the regulator’s findings hold, the case would expose how offshore subsidiaries, opaque consolidation and weak disclosure controls can combine to obscure the real scale of a listed business.

The market reacted quickly. Rajesh Exports shares fell about 5% on June 4, 2026, hitting the lower circuit in early trade and changing hands around 103.92 rupees to 104.65 rupees. The company’s market capitalization was roughly 3,090 crore rupees to 3,230 crore rupees, far below its 52-week high of about 239 rupees and above its 52-week low of roughly 80.11 rupees to 80.38 rupees. Mehta later said the company’s financial disclosures over the years were correct. For global funds and U.S. investors with exposure to Indian equities, the episode is a sharp reminder that headline revenue can be only as credible as the oversight behind it.