Rajesh Exports Limited (REL) has come under significant scrutiny following a recent interim order from the Securities and Exchange Board of India (Sebi). This order, consisting of 109 pages, questions revenues amounting to Rs 15.15 lakh crore attributed to the company’s subsidiaries and has mandated a new forensic audit. The news has led to immediate market reactions, with Rajesh Exports shares hitting the 5% lower circuit for two consecutive trading days.

Sebi’s order has also imposed restrictions on promoter-chairman Rajesh Mehta, prohibiting him from accessing the securities market during the ongoing investigation. This intervention by the regulator has attracted both media and investor attention, with many initially becoming aware of Rajesh Exports, a gold processing and retail company that owns Valcambi, one of the largest gold refineries globally, located in Switzerland.

However, questions regarding the legitimacy of Rajesh Exports’ financial disclosures have arisen well before Sebi’s latest findings. Analysts and investor advocates have long expressed concerns about whether the company’s reported financial performance accurately reflects its operational scale.

The Company Profile and Its Operations

Founded by Rajesh Mehta and based in Bengaluru, Rajesh Exports operates across various segments, including gold refining, jewellery manufacturing, and retail. Its acquisition of Valcambi in a $400 million deal in 2015 significantly enhanced its standing in the global gold market, positioning itself among the leading companies in precious metals refining.

Evidence of Rajesh Exports’ immense scale can be observed in its reported revenues, which have been substantial in recent years. Figures cited in Sebi’s interim order reveal consolidated revenues of approximately Rs 2.58 lakh crore in FY21, Rs 2.43 lakh crore in FY22, Rs 3.39 lakh crore in FY23, Rs 2.80 lakh crore in FY24, and Rs 4.23 lakh crore in FY25. Notably, revenue reportedly soared to nearly Rs 7.78 lakh crore in FY26.

Despite these staggering sales figures, the company has often experienced modest profits. For instance, in the March 2026 quarter, Rajesh Exports reported a revenue of Rs 2.36 lakh crore yet recorded a net loss of Rs 53.5 crore. This discrepancy between high revenues and low profitability has baffled market observers for years.

Historical Context of Financial Concerns

Rajesh Exports’ financial practices have been scrutinised since at least 2014, when a detailed report by Moneylife questioned the credibility of the company’s financial statements. At the time, the company claimed annual revenues exceeding Rs 31,000 crore, but Moneylife highlighted significant discrepancies, such as unexpectedly low employee costs and unusually small figures for selling and administrative expenses.

The report further pointed out inconsistencies in the company’s financial statements, particularly in relation to its substantial reported cash reserves alongside significant borrowings. Such anomalies raised flags about the viability of Rajesh Exports’ reported income and overall business operations.

In subsequent years, Debashis Basu, a prominent investor-rights advocate, continued to voice scepticism about the company’s financial disclosures. His public remarks indicated persistent concerns regarding the mismatch between reported revenues and operational costs, which culminated in renewed interest in the company’s financial reporting.

Current Investigations and Company Response

As per Sebi’s interim findings, the investigation has progressed following shareholder complaints about financial disclosures and large outstanding receivables. Notably, between 97% and 99% of Rajesh Exports’ consolidated income has allegedly come from subsidiaries and branches, raising questions about potential revenue inflation.

Sebi has encountered challenges in accessing vital data, including transaction-level information related to overseas entities. Discrepancies in subsidiary reporting and concerns over related-party transactions have also surfaced, suggesting deeper issues within the company’s financial framework. The regulator continues to monitor the investigation closely.

In response to these allegations, Rajesh Exports has vehemently denied any wrongdoing. The company asserts that its reported revenues are accurate and that there is no overstating of financial figures. In a statement, it mentioned a “communication gap” with Sebi and expressed confidence that the ongoing investigation will clarify these issues.

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