Sebi flags ₹15 trillion misstatement in Rajesh Exports accounts
MUMBAI: The Securities and Exchange Board of India ( Sebi ) has alleged that Rajesh Exports Ltd misreported almost all of its revenue in five financial years, raising serious questions about the accuracy of the jewelery maker’s financial statements.
In the 109-page interim order issued on Wednesday, the regulator said prima facie findings indicate that Rajesh Exports overstated and misrepresented the operational scale of the group and its financial performance between FY21 and FY25. He claimed about ₹15.15 trillion, or 99.8%, of the revenue attributed to the company’s subsidiaries during the period was misstated.
The investigation stemmed from a shareholder complaint in March 2024 that flagged potential financial misrepresentations linked to large outstanding trade receivables.
There was no immediate response to queries emailed to Rajesh Exports on Wednesday.
At the heart of Sebi’s findings is the group’s offshore structure, including Switzerland-based Valcambi SA, which Rajesh Exports identified as its main operating entity. It was reported that approximately 97-99% of the company’s consolidated revenue comes from overseas subsidiaries and downsized subsidiaries.
Sebi, however, said it found a mismatch between the consolidated revenues reported by the group and the independently audited financial statements of Valcambi SA. According to the order, Valcambi’s standalone revenue constituted less than 0.5% of the consolidated revenues reported by Rajesh Exports and its holding subsidiary Global Gold Refineries AG (GGR), despite being presented as the group’s primary operating business.
The regulator also said the company had repeatedly failed to provide detailed information on consolidated operations, including batch-wise data on sales, purchases, debtors, creditors and inventories. Rajesh Exports cited Swiss data protection laws and confidentiality obligations to justify non-disclosure. Sebi rejected the claim, saying these provisions apply to personal data and cannot override disclosure requirements under Indian securities laws.
“A listed entity operating in the Indian securities market cannot rely on specific privacy regulations or foreign data protection provisions to avoid or mitigate statutory disclosure obligations under Indian securities laws,” the regulator said in its interim order.
Sebi also flagged inconsistencies in the statements submitted during the investigation. Customer-by-customer sales figures submitted to the regulator varied between applications, with some customers appearing in one data set but not another. Sales figures for the same customers also differed between applications.
He said these contradictions undermined the credibility of the information provided and hindered the investigation.
Beyond consolidated accounts, the order also identifies problems with standalone financial statements, consolidation practices, claims related to investments in African gold mines, the adjustment of trade receivables to trade payables, and allegations of misuse of company funds.
REL and Rajesh Mehta have been instructed to cooperate in the investigation. Mehta was also banned from buying or selling shares of Rajesh Exports until further orders.
“A detailed investigation is required in this regard by Sebi into the violations committed by the Notifications and other suspects, including but not limited to examination of the company’s books of accounts to bring out the true and fair picture of the company’s financials,” the regulator said.
