The Securities and Exchange Board of India (SEBI) has issued an interim order on Wednesday, accusing jewelry manufacturer Rajesh Exports of inflating its revenue by a staggering Rs 15.15 lakh crore over several years, primarily through unreliable foreign subsidiaries. The company and its promoter, Rajesh Mehta, have been prohibited from participating in the securities markets until the regulator completes its inquiry, according to media reports.
SEBI's Findings on Revenue Inflation
The markets regulator highlighted that foreign subsidiaries, particularly Switzerland-based Valcambi SA, accounted for 97 to 99 percent of Rajesh Exports' total revenue. However, the company frequently withheld financial information about these subsidiaries from the public. Although Valcambi SA was presented as the primary operational entity, its audited financial statements revealed very small standalone revenues, raising red flags.
SEBI also pointed out that Rajesh Exports reported sales of Rs 114.87 billion and acquisitions of Rs 114.88 billion with Affluence Shares and Stocks Private Limited. However, Affluence denied any such transactions, indicating that these were fake entries linked to Mehta's personal derivative trades. These trades were used to artificially boost turnover without any underlying economic activity.
Financial Irregularities and Unauthorized Transfers
According to the regulator, Rajesh Exports transferred Rs 3.39 billion of company funds, including for derivative trades, to Mehta's personal accounts without board or audit committee approval. The company also failed to make the required related-party disclosures. In total, Rs 9.26 billion were transferred without authorization or transparency, leading to a loss of Rs 127.26 billion for shareholders, particularly small investors.
Political Reactions
Jairam Ramesh, General Secretary in-charge Communications of the Indian National Congress, commented on the matter, stating that SEBI's interim report dated June 3, 2026, alleges a gigantic scam involving Rajesh Exports. He noted that the revenue misrepresentation over five years (2020-21 to 2024-25) amounts to a staggering Rs 15 lakh crore. Ramesh expressed concern that Life Insurance Corporation (LIC) owns about 10.8 percent of Rajesh Exports, and banks have considerable exposure to the company. He questioned how LIC could have missed such a massive fraud and whether its stake acquisition was driven by instructions from the ruling ecosystem.
Company's Response
Rajesh Exports has refuted the findings of the SEBI order. Rajesh Mehta stated, "It is an interim order and nothing in it is true. We are in the process of studying it and will prepare a response." The company maintains that the allegations are baseless and that it will cooperate with the investigation.
The SEBI investigation is ongoing, and a final report is awaited. The ban on Rajesh Exports and its promoter remains in effect until further notice.
