Securities and Exchange Board of India Flags ₹15 Trillion Accounting Misstatement in Rajesh Exports Financial Statements

Sebi Alleges Rajesh Exports Misrepresented Nearly All Revenue Over Five Years

MUMBAI: The Securities and Exchange Board of India (Sebi) has issued a 109-page interim order alleging that Rajesh Exports Ltd misrepresented nearly all of its revenue over five financial years, raising serious questions over the accuracy of the jewellery maker's financial statements.

According to the order, Sebi's prima facie findings indicate that Rajesh Exports overstated and misrepresented the group's operational scale and financial performance between FY21 and FY25. The regulator alleged that about ₹15.15 trillion, or 99.8% of revenue attributed to the company's subsidiaries during the period, was misrepresented.

The probe stemmed from a shareholder complaint in March 2024, which flagged potential financial misrepresentation linked to large outstanding trade receivables. Queries emailed to Rajesh Exports on Wednesday did not receive an immediate response.

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At the centre of Sebi's findings is the group's overseas structure, including Switzerland-based Valcambi SA, which Rajesh Exports had described as its principal operating entity. About 97-99% of the company's consolidated revenue was reported to originate from overseas subsidiaries and step-down subsidiaries.

However, Sebi said it found a mismatch between consolidated revenues reported by the group and the standalone audited financial statements of Valcambi SA. According to the order, Valcambi's standalone revenue accounted for 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 main operating business.

The regulator also said the company repeatedly failed to furnish detailed information on consolidated operations, including party-wise data on sales, purchases, debtors, creditors, and inventory. Rajesh Exports cited Swiss data protection laws and confidentiality obligations to justify the non-disclosure. Sebi rejected the argument, saying those provisions apply to personal data and cannot override disclosure requirements under Indian securities law.

Sebi further flagged inconsistencies in submissions made during the investigation. Customer-wise sales figures provided to the regulator varied across filings, while some customers appeared in one dataset but not in another. Sales figures for the same customers also differed across submissions.

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The order also identifies issues in standalone financial statements, consolidation practices, claims related to investments in African gold mines, adjustments of trade receivables against trade payables, and alleged misutilisation of company funds. REL and Rajesh Mehta have been directed to cooperate with the investigation. Mehta has also been barred from trading in the shares of Rajesh Exports until further orders.

"A detailed investigation by Sebi is required in the instant matter with respect to violations committed by Noticees and other suspects, including but not limited to the examination of books of accounts of the company to bring out true and fair picture of the company's financials," the regulator said.