14/06/2026
MUMBAI / BENGALURU — In what is being described as one of the most staggering corporate governance scandals in Indian market history, the Securities and Exchange Board of India (SEBI) has blown the lid off an astronomical financial controversy involving Bengaluru-based gold refiner and jewelry giant, Rajesh Exports Limited (REL).
In a scathing 109-page interim order, India's market regulator has accused the company and its promoter, Rajesh Mehta, of orchestrating an elaborate financial fraud characterized by an alleged revenue inflation of an unprecedented ₹15.15 lakh crore over a five-year period.
The Scale of the "Illusion"
The controversy traces back to a shareholder complaint flagged in March 2024 regarding massive trade receivables in the company’s books. Following a forensic audit conducted by BDO India Services, SEBI’s initial findings revealed what it termed "egregious and unheard of" accounting irregularities.
According to SEBI, between Financial Year 2021 (FY21) and Financial Year 2025 (FY25), 99.8% of the company's reported consolidated revenue was allegedly fabricated or misrepresented through a complex web of shell transactions and overseas subsidiaries.
The regulatory body noted:
"The acts of REL constitute a deliberate device, scheme and artifice to mislead and defraud investors dealing in the shares of REL by portraying an inflated and misleading picture of its operational scale, revenue and financial health."
In addition to the revenue padding, SEBI flagged the diversion of corporate funds into personal accounts, fabricated claims regarding an African gold mine, and a deliberate attempt to stonewall investigators by withholding data behind Swiss confidentiality defenses.
The Global Link: Swiss Refinery and the "Accounting Error" Defense
Central to Rajesh Exports' defense is its prized international asset—Valcambi SA, a Switzerland-based entity recognized as one of the world's largest gold refineries.
In a strong rebuttal, Executive Chairman Rajesh Mehta vehemently denied the fraud allegations, dismissing the ₹15.15 lakh crore figure as a massive "communication error" and a fundamental misunderstanding of gold bullion accounting by the regulator.
Mehta and the company issued a 10-point clarification stating:
The Valcambi Factor: The massive consolidated revenues are entirely genuine and stem from Valcambi's global operations refining and selling gold bullion to central banks and major international institutions.
The "EBITDA vs. Revenue" Mix-up: Mehta argued that SEBI officials accidentally confused gross profits/EBITDA figures with actual revenue when assessing the multi-jurisdictional data.
Debt-Free Status: The management emphasized that Rajesh Exports is completely debt-free, has never defaulted on any lenders, and hasn't raised public equity since its initial public offering (IPO) in 1995.
The company claims it has already submitted over 300 to 400 gigabytes (GB) of data spanning lakhs of pages to SEBI to clear up the "confusion". Mehta stated they would not formally contest the interim order but would continue to cooperate to clear their name.
Market Carnage and Institutional Exposure
Despite the company’s assurances that it is "business as usual," the stock market reacted with sheer panic.
Rajesh Exports’ stock plunged into consecutive 5% lower circuits, sinking to a 52-week low of ₹77.05. This marks a staggering and devastating 90% erosion in value from its peak of ₹946 in January 2023, leaving retail investors trapped in severe financial losses.
The heat has also turned toward state-owned behemoth Life Insurance Corporation of India (LIC), which holds a notable 10.80% stake in the company. Addressing the backlash over institutional exposure, Mehta clarified to the media that LIC accumulated its shares via the open market over a 20-year period and that the promoters had no contact or influence regarding LIC’s investment choices.
