SEBI's Interim Order Against Rajesh Exports

On 3 June 2026, SEBI whole-time member Kamlesh Chandra Varshney signed a 109-page interim ex-parte order against Rajesh Exports Limited and its promoter Rajesh Mehta. The order, catalogued as WTM/KV/CFID/CFID-SEC6/32431/2026-27, is one of the most detailed and damning regulatory documents issued against an Indian listed company in recent memory.

It does not merely allege that revenues were inflated. It sets out, chapter by chapter, how revenues attributed to Swiss subsidiaries could not be verified, how standalone transactions with an entity that denied dealing with the company inflated the India books, how Rs 338.90 crore flowed to the promoter's personal accounts without board approval, and how a claim of investing Rs 1,035 crore in gold mines in Africa could not be corroborated anywhere in the financial statements.

The market's reaction was immediate. Shares hit the 5 percent lower circuit on 4 June. The stock has now fallen more than 54 percent from its 52-week high of Rs 239 reached in December 2025. The company's market capitalisation as of the order date was Rs 3,210 crore, down from multiples of that when the stock was at its peak.

This article works through the order section by section, using the actual text, tables, and amounts to explain precisely what SEBI found and why it found the order necessary at this stage.

How the Investigation Began

The investigation stems from a shareholder complaint received on 11 March 2024, alleging potential financial misrepresentation concerning large trade receivables that had been outstanding for more than two years. SEBI appointed an investigating authority on 23 October 2024 and engaged BDO India Services Private Limited as forensic auditor on 3 December 2024. The formal investigation period runs from 1 April 2020 to 31 March 2024, with references to periods outside it where relevant.

The forensic audit process itself became a finding. BDO reported that REL refused to provide access to its Enterprise Resource Planning systems, its books of accounts, and vital journal dumps. For the overseas subsidiaries, REL claimed it was prevented from sharing data by Swiss law. SEBI rejected this argument in detail, pointing out that the Swiss Federal Act on Data Protection applies only to natural persons, not corporations, and that even the personal-data provisions have exceptions for regulatory and legal proceedings.

The non-cooperation is quantified starkly. Out of transaction samples worth Rs 7,021 crore in purchase testing, complete documentation was provided for only 2.03 percent of the sample value. Of Rs 12,217 crore in sales samples, only 35.07 percent could be verified with complete documentation. The rest was either partially documented or entirely unsubstantiated.

Date	Event	Significance
11 March 2024	Shareholder complaint about large unresolved trade receivables	Starting point of the investigation
23 October 2024	Investigating authority appointed by SEBI	Investigation formally begins
3 December 2024	BDO India Services appointed as forensic auditor	External forensic review commences
Throughout 2025	Multiple summons; limited and contradictory compliance; BDO denied ERP access	Non-cooperation documented formally
25 March 2026	BDO submits forensic audit report, subject to extensive limitations	First formal audit output
3 June 2026	SEBI issues 109-page interim ex-parte order	Regulatory action; promoter barred from trading

The Corporate Structure at the Centre of the Case

Understanding the allegations requires understanding how Rajesh Exports is structured. The listed Indian entity sits at the top. Below it is REL Singapore Pte Ltd, a wholly owned subsidiary that SEBI's order notes had nil revenue from operations during the period examined.

Below REL Singapore is Global Gold Refineries AG (GGR), a Swiss entity in which REL Singapore holds 95 percent and REL India holds 5 percent directly. SEBI notes that GGR is a holding company and has no day-to-day operations. Below GGR sits Valcambi SA, the actual Swiss gold refiner with a global reputation.

REL's own management stated in depositions that Valcambi SA is the principal operating entity driving consolidated revenues. GGR and REL Singapore are holding vehicles with no independent operations. On this basis, all of REL's consolidated revenues attributed to overseas operations should, in substance, be Valcambi's revenues.

The problem is that Valcambi SA's audited standalone financial statements, prepared under Swiss law and signed off by KPMG SA, tell a very different story. Valcambi recognises only processing charges and value addition as revenue, not the gross value of gold transactions. In CY 2023, Valcambi SA's standalone revenue was CHF 59.01 million, equivalent to approximately Rs 542.68 crore.

In the same year, GGR reported consolidated revenues of approximately Rs 2,92,714 crore, and REL reported consolidated revenues of Rs 2,80,676 crore. Valcambi SA's audited revenue was less than 0.19 percent of the revenues REL attributed to the group it owns.

Financial Year	REL Consolidated Revenue (INR crore)	REL Standalone Revenue (INR crore)	Subsidiary Revenue (Difference)	Valcambi SA Standalone Revenue (INR crore)
FY 2020-21	2,58,306	2,060	2,56,245 (99.20%)	~586 (0.23%)
FY 2021-22	2,43,128	6,237	2,36,891 (97.43%)	~729 (0.30%)
FY 2022-23	3,39,690	5,762	3,33,928 (98.30%)	~743 (0.22%)
FY 2023-24	2,80,676	5,401	2,75,276 (98.08%)	~543 (0.19%)
FY 2024-25	4,23,099	7,027	4,16,072 (98.34%)	~427 (0.10%)

REL's explanation for this gap was that GGR recognised the gross value of gold transactions that Valcambi processed, while Valcambi itself only recognised the processing fee. SEBI's order dismisses this explanation at length, noting that Valcambi's audited statements specifically show it does not take ownership of the gold it refines and correctly recognises only value addition.

GGR, admittedly a holding company with no operations, cannot logically recognise as its own revenue the gross value of goods that Valcambi did not itself own. The order finds this prima facie commercially implausible and internally inconsistent.

Valcambi SA, the only operating entity in the Swiss chain, reported audited revenue of less than 0.3% of what REL attributed to its overseas subsidiaries in each year examined. GGR, a holding company with no operations, was the vehicle through which the inflated figures were consolidated.

SEBI's Quantification: Rs 15,15,385 Crore in Prima Facie Misrepresentation

SEBI's order quantifies the prima facie misrepresentation by comparing the subsidiary revenues REL reported against what Valcambi SA's audited standalone statements show as verifiable revenue. The five-year total is set out in the order as follows.

Year	Subsidiary Revenue Attributed (INR crore)	Valcambi SA Verified Revenue (INR crore)	Apparent Misrepresentation (INR crore)
FY 2020-21	2,56,245	586	2,55,659 (99.77%)
FY 2021-22	2,36,891	729	2,36,163 (99.69%)
FY 2022-23	3,33,928	743	3,33,185 (99.78%)
FY 2023-24	2,75,276	543	2,74,733 (99.80%)
FY 2024-25	4,16,072	427	4,15,646 (99.90%)
Total FY21-25	15,18,413	3,027	15,15,385 (99.80%)

The order notes that the GGR consolidated financial statements used for this consolidation were voluntarily prepared under a Group Accounting Manual and were not subjected to any statutory audit under Swiss law.

KPMG SA, which audited Valcambi's standalone statements, explicitly clarified that its opinion on GGR's consolidated statements did not constitute a statutory audit opinion. In other words, the figures flowing into REL's Rs 15 lakh crore-plus of consolidated revenue were sourced from unaudited documents prepared by the holding company itself.

The consolidated-level misrepresentation was accompanied by a separate and in some ways more striking set of findings about REL's standalone books. The order focuses on transactions recorded with an entity called Affluence Shares and Stocks Private Limited, a SEBI-registered stockbroker.

According to the order, REL recorded sales of Rs 11,487 crore and purchases of Rs 11,488 crore with Affluence during FY 2021-22 to FY 2023-24. These transactions constituted approximately 66 percent of REL's standalone sales and 67 percent of its standalone purchases during that period. The near-perfect matching of sales and purchase amounts in each year, with differences of only Rs 1.35 crore, Rs 0.26 crore, and Rs 0.22 crore respectively, itself raised concerns.

When SEBI approached Affluence directly, the responses were definitive. Affluence stated that REL was never its client, that no agreement or contract had been entered into with REL, and that no sale or purchase transactions were executed with or on behalf of REL. The promoter of Affluence, Mr. Dhiren Shah, confirmed in a deposition before SEBI on 3 October 2025 that Affluence had trading relations only with Rajesh Mehta personally, not with REL.

The investigation uncovered what SEBI describes as the actual substance of these transactions. Rajesh Mehta had a personal trading account with Affluence and traded in gold derivatives. The records show that REL transferred Rs 7.45 crore to Rajesh Mehta, who used the money to trade in gold derivatives through his personal account. Affluence refunded the balance of Rs 3.94 crore to Rajesh Mehta after accounting for trading losses of Rs 3.51 crore, and Rajesh Mehta transferred Rs 3.91 crore back to REL.

The transactions recorded in REL's books as massive gold commodity trades with Affluence actually correspond to Rajesh Mehta's personal derivatives trading activity. Affluence's own financial statements show total revenue from operations of Rs 113.22 crore and purchases of Rs 84.64 crore over the same three-year period, making transactions of Rs 11,400 crore each with a single counterparty an impossibility.

The Rs 11,487 crore in sales REL recorded with Affluence corresponded not to gold commodity trades, but to Rajesh Mehta's personal gold derivatives trading through his own account with Affluence, funded partly by company money.

Fund Flows Through Personal Accounts: Rajesh Mehta, Siddharth Mehta, and Elest

Section B.9 of the order is dedicated to what SEBI terms misutilisation of funds. The investigation examined bank statements of REL from April 2020 to September 2025 and found substantial fund flows to related parties that were neither disclosed nor approved.

Transfers to Rajesh Mehta personally: Between April 2020 and September 2025, REL transferred Rs 338.90 crore to Rajesh Mehta's personal bank accounts across multiple tranches. Rajesh Mehta transferred back Rs 232.44 crore.

After accounting for Rs 77 crore deposited with the High Court of Karnataka, remuneration payments, and dividend-related transfers, SEBI notes there is still an unexplained differential. The uses disclosed by the company include maintaining confidentiality of bank accounts, parking of funds for court proceedings, facilitation of onward transfers, and interest-free loans.

SEBI found no documentary evidence such as loan agreements, board approvals, or audit committee approvals supporting these explanations. The company's own email of 17 March 2026 admitted funds were routed through Rajesh Mehta's account without revealing the originating bank account.

Transfers to Siddharth Mehta (Rajesh Mehta's son): Rs 21.25 crore was transferred to Siddharth Mehta, with Rs 5.79 crore returned, a net Rs 15.46 crore. Neither Siddharth Mehta nor these transactions were disclosed as related party transactions in any annual report. REL's KMPs stated in depositions that Siddharth Mehta had no role in REL and received no monetary benefits. The bank statement analysis contradicted this.

Transfers to Elest Pvt Ltd: Elest was incorporated on 26 October 2020 by Rajesh Mehta and Prashant Mehta, with a nominal capital of Rs 1 lakh. Between April 2020 and December 2025, REL transferred Rs 565.88 crore to Elest, with Rs 350.03 crore returned, a net outflow of Rs 215.85 crore.

The board and audit committee of REL had approved only an investment of Rs 200 crore and a loan of Rs 75.15 crore to Elest. The REL Managing Director and CFO both stated in depositions that they were unaware of the remaining banking transactions between REL and Elest.

Entity	Total Transferred From REL	Total Returned to REL	Net Outflow	Disclosures Made
Rajesh Mehta (personal accounts)	Rs 338.90 crore	Rs 232.44 crore	Rs 106.46 crore (approx)	Only Rs 1.20 lakh annual remuneration disclosed as related party transaction
Siddharth Mehta (promoter's son)	Rs 21.25 crore	Rs 5.79 crore	Rs 15.46 crore	Not disclosed as related party; KMPs denied he had any role
Elest Pvt Ltd (promoter-controlled)	Rs 565.88 crore	Rs 350.03 crore	Rs 215.85 crore	Only Rs 200 crore investment and Rs 75.15 crore loan approved by board; rest unexplained

The African Gold Mines That Could Not Be Found

When NSE sought clarification about Rs 1,035 crore of Other Non-Current Investments in REL's consolidated balance sheet for FY 2022-23, REL replied that the amount pertained to investment in gold mines in Africa. SEBI then examined whether any such investment could be traced in any of the entities in the corporate structure.

It could not. The standalone financial statements of REL India for FY 2022-23 show investments in subsidiaries totalling Rs 2,348 crore, broken down into specific entities. There is no line item for gold mines in Africa. REL Singapore's assets in the same period show only its investment in two subsidiaries. GGR's non-current assets are analysed in detail and consist of land, buildings, machinery, other equipment, work in progress, and intangible assets, none of which correspond to gold mine investments.

REL's response when confronted with this was that it was unable to locate its earlier exchange response due to absence of date details, and that investments in gold mines existed through foreign subsidiaries with figures that were tallying and correct. No entity-wise breakup, reconciliation statement, financial statement reference, valuation report, or supporting documentation was furnished.

Separately, in a deposition before SEBI, REL's own Managing Director stated: Valcambi SA does not have any gold mine on its own. It refines the raw gold purchased by it from various entities, whose names I do not recollect, as these things are exclusively handled by Rajesh Mehta.

Incorrect Consolidation: Intra-Group Balances Left in the Books

SEBI's order also identifies a consolidation error in REL's most recent balance sheet. As of 31 March 2025, SEBI found that intra-group investments of Rs 2,501 crore and intra-group trade payables of Rs 1,457 crore had not been eliminated from REL's consolidated financial statements as required under Ind AS 110. As of 31 March 2024, intra-group trade payables of Rs 1,379 crore were similarly uneliminated.

When SEBI raised this, REL attributed it to inadvertent classification errors in its exchange responses and stated that the relevant Valcambi SA entry ought to have been eliminated. It did not furnish revised consolidation workings, elimination entries, or documentation demonstrating that the balances had in fact been eliminated during the preparation of the financial statements. SEBI found this explanation unsatisfactory and found a prima facie violation of Ind AS 110 and related LODR regulations.

The Auditors: Their Role and the NFRA Referral

The order identifies the statutory auditors of REL as CA P V Ramana Reddy, Proprietor of M/s P V Ramana Reddy and Co, and CA P L Venkatadri, Partner at M/s BSD and Co. During depositions on 16 January 2026, both auditors undertook to provide missing subsidiary financial statements and their complete audit working papers. As of the date of the order, no such documents had been received by SEBI.

The order directs that a copy be forwarded to the National Financial Reporting Authority (NFRA) for appropriate action, if any, against the statutory auditors. The order describes this referral as flowing from prima facie misconduct and dereliction of duties on the part of the statutory auditors. NFRA will conduct its own independent inquiry; the SEBI order does not constitute a finding of guilt against the auditors.

What the Order Directs: The Formal Measures

The order issues the following specific directions, effective until further orders.

• Noticee 2 (Rajesh Mehta) is restrained from buying, selling or dealing in securities of Rajesh Exports, either directly or indirectly, in any manner whatsoever.

• Noticee 1 (Rajesh Exports) is directed to make true and fair disclosures of its financial statements, related party transactions, and other disclosures under the LODR Regulations.

• Both noticees are directed to cooperate with the investigating authority and provide all documents within 30 days of the order.

• The investigating authority is directed to appoint a new forensic auditor to complete the forensic audit, as BDO was unable to complete its work due to non-cooperation. The noticees are directed to cooperate fully with the new forensic auditor.

• A copy of the order is to be forwarded to NFRA for examination of the statutory auditors.

• Both noticees have 21 days from receipt of the order to file their reply and indicate whether they wish a personal hearing.

The Company's Response

Rajesh Exports filed a five-point clarification on 4 June 2026. The company states that the order is interim and no adverse final conclusion has been reached. It maintains its revenues are correct and attributes any discrepancy to a communication gap and confusion between the regulator and the company. It says it is confident SEBI will arrive at the correct conclusion after reviewing authenticated documents.

The difficulty with this response is that the order's account of events is detailed and specific. It describes summons issued in June, July, and July 2025, November and December 2025, and January, February, and March 2026 with limited compliance. It describes a forensic auditor told that Swiss law prevented data sharing, a claim SEBI rejected by quoting the actual text of the Swiss legislation.

It describes Affluence's direct and unambiguous denial of any transactions with REL. It describes an MD who stated in a formal deposition that he had no role in day-to-day operations of any subsidiary and that everything overseas was exclusively handled by Rajesh Mehta. A communication gap between a regulator and a company does not typically produce these documented facts over a two-year investigation.

SEBI's investigation covered two years, more than a dozen summons, a forensic auditor, and direct third-party confirmations. The company describes the outcome as a communication gap.

What This Stage of the Process Means

The order is interim and ex-parte. Prima facie does not mean proven. The company and promoter have 21 days to respond and can request a personal hearing. SEBI may issue a final order that is more severe, or it may conclude after receiving documentation that some findings are explained satisfactorily. Neither outcome can be predicted at this point.

Term	What It Means	What It Does Not Mean
Prima facie finding	Evidence examined so far is sufficient to raise serious regulatory concern and justify protective action	A final determination; the noticees have not been adjudicated guilty
Interim ex-parte order	Issued without prior hearing due to urgency; risk of asset dissipation was cited as justification	A final order; full hearing follows
Promoter barred from trading	Civil regulatory measure; Rajesh Mehta cannot transact in REL securities	Criminal arrest or charge
NFRA referral for auditors	NFRA will conduct its own independent inquiry into the auditors	Auditors found guilty; NFRA inquiry is a separate process

Broader Implications of the Case

Several features of this case extend its significance beyond Rajesh Exports itself.

First, the Swiss subsidiary structure. REL's ability to report enormous consolidated revenues through overseas subsidiaries while the operating entity's audited accounts showed negligible revenues highlights the opacity that can develop when a listed Indian company consolidates operations through multiple layers of overseas holding companies.

The Swiss data protection claim, the absence of audited GGR consolidated financials, and the difficulty SEBI encountered in obtaining basic customer and vendor records from entities that Rajesh Mehta himself acknowledged he alone controlled all illustrate how cross-border corporate structures can complicate regulatory scrutiny.

Second, the auditor question. The order's detailed account of what the statutory auditors were and were not able to verify, and what they undertook to provide but did not, raises questions about the independence and scope of audit work in complex multi-subsidiary structures. The NFRA referral places this question in a formal investigative context.

Third, the scale. Five years of consolidated revenues totalling Rs 15,44,899 crore (approximately USD 180 billion at current rates) were reported by a company with standalone revenues that never exceeded Rs 9,189 crore in any single year during the same period. The ratio, at times exceeding 99 to 1 of unverifiable to verifiable revenue, is what prompted the WTM's own language in the order: egregious and unheard of.

What to Watch Next

• The company's formal response to SEBI within 21 days, and the authentication documentation it submits.

• Appointment of the new forensic auditor and whether access to ERP systems and books is now provided.

• NFRA's response to the referral and any preliminary communications from its auditor inquiry.

• Whether SEBI issues a further order modifying, upholding, or expanding the interim directions after the company's response is received.

• Valcambi SA's own communications: the Swiss entity carries an international reputation in gold refining and has not itself been named as a noticee.

• Any stock exchange communications regarding surveillance measures on the scrip.

Note: This article is based on SEBI's 109-page interim ex-parte order (WTM/KV/CFID/CFID-SEC6/32431/2026-27) dated 3 June 2026, reviewed in full. All findings are prima facie allegations. SEBI has not issued a final order. Rajesh Exports has denied the allegations. This article is for informational purposes only and is not investment advice.

Disclaimer: This article is for informational purposes only and does not constitute investment or financial advice. All findings described are prima facie allegations in SEBI's interim order dated 3 June 2026 and have not been adjudicated in a final order. Rajesh Exports has denied the allegations. Revenue and fund-flow figures are drawn directly from tables in the SEBI order. Exchange rate conversions are approximate. Equity investments are subject to market risk including the risk of total loss. Investors should consult a SEBI-registered adviser before making any trading decision.