SEBI accuses Rajesh Exports of misstatement of revenue of Rs 15.15 lakh crore

SEBI has alleged that Rajesh Exports had misrepresented revenues aggregating about ₹15.15 lakh crore over various financial years. The regulator has also ordered that Rajesh Exports and its Chairman and Managing Director Rajesh Mehta be restrained from accessing the securities market till further orders.

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

In an interim ex parte order issued on June 4, SEBI outlined prima facie findings related to alleged revenue inflation, questionable transactions and diversion of company funds. The regulator stated that the alleged misstatement represented 99.80% of the company’s consolidated revenue generated through subsidiaries between FY21 and FY25.

Revenue Disclosure Under Scrutiny

According to SEBI, between 97% and 99% of Rajesh Exports’ consolidated revenue originated from overseas subsidiaries, particularly Switzerland-based Valcambi SA. However, the regulator noted that detailed financial information relating to these subsidiaries was not adequately disclosed in the public domain.

The order further stated that while Valcambi SA was presented as a key operating subsidiary within the group structure, its standalone audited financial statements reflected minimal revenue generation.

Based on its preliminary findings, SEBI alleged that the company’s reported consolidated revenue from subsidiaries during the period under review lacked adequate substantiation, leading to a significant overstatement of financial performance.

Questions Raised Over Transactions

The regulator also flagged transactions involving Affluence Shares and Stocks Private Limited. As per the order, Rajesh Exports recorded sales of ₹11,487 crore and purchases of ₹11,488 crore with the entity. However, SEBI stated that Affluence denied carrying out such transactions with the company.

The regulator alleged that these entries were non-genuine and were linked to derivative trading activities undertaken by promoter Rajesh Mehta. According to the order, the transactions may have been used to artificially increase turnover figures without corresponding economic activity.

Alleged Fund Diversion

SEBI further alleged that company funds amounting to ₹339 crore were transferred to accounts associated with Rajesh Mehta and were utilised for personal derivative trading activities.

The order stated that these transactions were carried out without approval from the board of directors or the audit committee and were not disclosed as related-party transactions. In total, the regulator estimated that ₹926 crore was routed without the required approvals and disclosures.
Shareholder Impact

The market regulator said the alleged financial misrepresentation and fund diversion resulted in significant harm to investors. SEBI estimated the erosion in shareholder wealth at ₹12,726 crore, affecting both institutional and retail investors.

The investigation remains ongoing. The interim restrictions imposed by SEBI will remain in force pending further examination of the allegations and related financial records.