For nearly thirty years, Rajesh Exports represented Indian entrepreneurial ambition. The success story of its promoters, Rajesh and Prashanth Mehta, inspired countless Gujarati entrepreneurs, to whom it proved that a small family jewellery dhanda (business) could become a global gold empire. Their 2015 acquisition of Swiss gold giant Valcambi SA made headlines worldwide and put them among India’s top business icons.
It was said for years that Rajesh Exports is the only company in the world with presence across the entire gold value chain, from refining to retailing and that it is the largest processor of gold in the world. REL, as Rajesh Exports is known, was said to process 35% of gold produced in the world. Sources said its sales so far would have easily surpassed $45 billion. The company also owns Valcambi, said to be the world’s largest gold refinery at Balerna in Switzerland.
Valcambi is owned by European Gold Refineries, which is owned by Global Gold Refineries AG, which in turn is 95% owned by REL Singapore PTE Ltd. and 5% by Rajesh Exports Limited India. Valcambi is thus 100% controlled by Rajesh Exports, the parent company of REL Singapore. SEBI also claims that shareholder wealth erosion linked to the alleged misconduct in the company could amount to Rs 12,726 crore.
But today, allegations of financial misrepresentation cloud that glittering success story. The Securities and Exchange Board of India (SEBI) has in an interim order related to an investigation into REL and its owner, Rajesh Mehta, concluded that Rs 15.15 lakh crore was allegedly misrepresented over five years. SEBI has, as a result, barred Rajesh Mehta from buying, selling or otherwise dealing in Rajesh Exports securities until further orders.
“It is an interim order and nothing in it is true,” Rajesh Mehta, chairman and managing director at REL said on June 3 as per reports, “We are going through the findings and will share a detailed statement,” he added.
But investors and admirers are left stunned, wondering what’s real and what isn’t. 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.
But tumbling share prices are just the tip of the iceberg. At the heart of SEBI’s case is a question that SEBI raises: How could a company report such astronomical revenues, year after year, with so little independently verified?
In March 2024, SEBI received representations questioning unusually large trade receivables that had remained outstanding for more than two years. (Receivables are amounts the company still has to receive from customers, which is a normal waiting period for a few weeks or months – not years.) Highly delayed receivables attract regulatory attention because they can indicate collection problems, questionable transactions or accounting irregularities.
SEBI appointed an investigating authority in October 2024 and subsequently commissioned a forensic audit. Investigators began examining the overseas subsidiaries through which Rajesh Exports claimed most of its business was conducted.
The regulator concluded in the interim order that between 97–99% of Rajesh Exports’ consolidated revenues were attributed to overseas subsidiaries and step-down subsidiaries, of which Valcambi SA was the principal revenue-generating engine.
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 (GGR). The basic question SEBI wanted answers to was: If Valcambi is the business that actually does the work, why does it report only Rs 543 crore while the holding company above it reports nearly Rs 3 lakh crore?
That gap is the stuff of boardroom nightmares. If SEBI’s preliminary findings are ultimately upheld, it would mean that revenues reported at the group level were vastly larger than revenues that could be independently verified through the records of the very subsidiary said to be generating the business.
The regulator’s order describes the discrepancies as “egregious and unheard of”, unusually blunt language for a securities regulator. SEBI alleged that the reporting practices enabled Rajesh Exports to project an inflated picture of its operational scale, financial health and overall business performance to investors and the securities market.
A recurring theme throughout the order is the alleged lack of cooperation extended to investigators and forensic auditors. SEBI said REL repeatedly failed to provide critical information relating to customers, suppliers, debtors, creditors and inventory records. 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 rejected those arguments, stating that foreign privacy provisions cannot override disclosure obligations imposed under Indian securities laws. In one of the strongest observations in the order, the regulator said that a listed company operating in Indian capital markets cannot rely on private confidentiality arrangements or foreign data protection provisions – that too, protections meant for individuals, not companies – to dilute or defeat statutory disclosure requirements.
The SEBI report says the lack of cooperation significantly hampered efforts to verify the company’s claims. Even where accounting ledgers were eventually provided, the records were allegedly incomplete and insufficient for forensic verification.
SEBI also questioned a reported investment of approximately Rs 1,035 crore in African gold mining assets. According to the regulator, the company failed to furnish adequate documentation supporting the existence, ownership and valuation of these investments. The order said SEBI was not provided entity-wise breakups, valuation reports, reconciliation statements or other records that would normally substantiate such significant investments.
Another red flag reportedly emerged from transactions involving Affluence Shares and Stocks Pvt Ltd. REL reportedly recorded sales and purchases exceeding Rs 11,000 crore with the entity. However, according to SEBI, Affluence claimed that Rajesh Export was not their client. This contradiction is stark.
Perhaps the most serious allegations concern the movement of company funds through the personal bank accounts of promoter-chairman Rajesh Mehta. SEBI alleged that corporate funds were routed through Mehta’s accounts for various purposes, including maintaining confidentiality, facilitating onward transfers and concealing the originating bank account.
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 order further alleges that transactions involving approximately Rs 7.4 crore moved through Mehta’s personal accounts before portions of the funds were returned to the company. It also raises questions about derivative trading allegedly conducted through the promoter’s personal trading account, even though related entries appeared in the company’s records.
In response to the findings, SEBI has barred Rajesh Mehta from buying, selling or otherwise dealing in Rajesh Exports securities until further orders. The regulator has also directed the company to make true and fair disclosures regarding its financial statements and related-party transactions and has ordered full cooperation with a fresh forensic audit.
The matter may also have consequences for the company’s auditors. SEBI has indicated that the case will be referred to the National Financial Reporting Authority, citing prima facie concerns regarding potential failures in statutory audit oversight.
The data below, from the SEBI report, shows why SEBI concluded that the revenues reported by REL were far larger than the revenues reported by the business that was supposedly generating them – Valcambi. It shows that between 2020 and 2024, Valcambi reported total revenue of about Rs 3,027 crore, while REL reported more than Rs 15 lakh crore in revenue over roughly the same period. This gap led SEBI to question where the group’s reported revenue was coming from.
For investors, the implications are enormous. Among the largest shareholders in Rajesh Exports is Life Insurance Corporation of India, which holds approximately 10.8% of the company. Because LIC’s investments are ultimately backed by millions of Indian policyholders, the controversy extends far beyond the company’s promoter group and institutional investors.
SEBI claims the alleged misconduct could amount to Rs 12,726 crore lost by ordinary investors. Rajesh Exports is simultaneously battling lender concerns, such as from Canara Bank, which has reportedly classified its exposure to the company as a stressed asset following repayment defaults and has initiated steps to auction outstanding dues estimated at around Rs 509 crore.
Some still stand by the Mehta brothers, insisting the charges are overblown or the result of some not-publicly-known reason masqueraded as regulatory action. There are whispers about unseen hands and vendettas.
SEBI’s findings remain preliminary and REL and Rajesh Mehta will have the opportunity to present their defence. The investigation is ongoing, and no final determination has yet been made.
The primary question in this matter is not just SEBI’s immediate findings but how a company could have concealed discrepancies of (allegedly) such extraordinary magnitude for nearly five years despite being listed on the stock exchange. What did the regulators do all this while?
The answers may ultimately determine not only the future of REL, but also the confidence investors place in the integrity of corporate disclosures across India Inc and the professionalism of Indian regulators.
REL is one of India’s largest listed companies by turnover, and the figures it reported were audited, disclosed to stock exchanges, scrutinised by analysts and relied upon by institutional investors, including LIC.
SEBI appears to have concluded in the interim report that the only significant operating business REL had was Valcambi SA, which operated overseas. There is nothing inherently suspicious about a listed Indian company generating most of its revenue overseas through subsidiaries. What regulators do care about is that overseas revenues are often harder for investors and regulators to independently verify. In this case, the difficulty appears to have arisen because REL failed to supply the data the SEBI investigator sought.
SEBI’s contention and REL’s response, which the SEBI did not find adequate. Source: SEBI.
The alleged discrepancies were further compounded by what SEBI described as repeated non-disclosure of underlying transaction data. Investigators claim they were denied party-wise details of customers, suppliers, inventory holdings, debtors and creditors. Requests for records were reportedly met with claims that Swiss data-protection laws prevented disclosure.
SEBI rejected that defence, arguing that foreign confidentiality provisions cannot override disclosure obligations under Indian securities laws.
The regulator also noted that forensic auditors were allegedly denied meaningful access to primary accounting records, enterprise resource planning systems and supporting documentation necessary to independently verify transactions. Even where records were provided, investigators found them incomplete or deficient.
Taken together, these factors may have created what experts describe as an “information black box” – bigger-picture revenues were reported to investors while underlying transactions remained difficult to verify independently.
The episode raises uncomfortable questions not only for Rajesh Exports but also for India’s financial regulatory systems. How did auditors sign off on accounts that are now under scrutiny? Why did the discrepancies not trigger regulatory intervention before? Did analysts and investors place excessive reliance on reported revenues without sufficiently examining cash flows, receivables and subsidiary-level disclosures? These questions are likely to remain at the centre of the investigation.
If SEBI’s allegations are ultimately proven, the scandal may not be merely about inflated revenues. It may also expose how opacity, complex cross-border structures, weak disclosures and insufficient scrutiny allegedly enabled one of the largest financial misrepresentation cases in recent corporate history to go undetected for years.
The alleged fraud, if proven, was not hidden in the shadows. It sat in annual reports, audited accounts and stock exchange filings – raising the uncomfortable question of whether the system was looking, but not seeing.
This piece was originally published on Vibes of India and is republished with permission. Read the original article here.