India’s capital markets regulator has launched a significant enforcement action against gold exporter and refiner Rajesh Exports Ltd., citing major inconsistencies in the company’s reported revenues and raising concerns about corporate governance, financial transparency, and fund management.
In an interim order issued this week, the Securities and Exchange Board of India (SEBI) said the Bengaluru-based firm may have overstated roughly ₹15.2 trillion (about US$159 billion) in revenue recorded through subsidiaries over a five-year period ending March 2025. SEBI added that the disputed amount corresponds to nearly all revenue reported by those subsidiaries during the review period.
SEBI has directed Rajesh Exports to ensure that all future financial statements and regulatory filings fairly and accurately reflect its operations and financial position. The regulator also placed restrictions on the company’s chairman and majority shareholder, Rajesh Mehta, barring him from trading in the company’s shares until further notice.
The order states that the allegedly inflated figures may have presented an exaggerated picture of the company’s scale and financial health, potentially affecting investor judgment. Following the regulatory action, Rajesh Exports’ shares hit their daily trading limit and have declined sharply in market value since the start of the year.
The matter has drawn widespread attention because of Rajesh Exports’ prominent position in the global precious metals sector. The company, which markets itself as one of India’s largest exporters of gold products, acquired Swiss refinery Valcambi in 2015 in a deal reported to be worth about US$400 million.
SEBI’s probe reportedly uncovered concerns about the movement of corporate funds, transactions involving entities linked to promoters, and difficulties in tracing several financial flows. The regulator emphasized that immediate measures were needed to protect corporate assets and safeguard investor interests while investigations continue.
The order also highlights the role and responsibilities of auditors in detecting possible accounting irregularities. SEBI flagged preliminary concerns about the conduct of the company’s statutory auditors, suggesting potential lapses in oversight and compliance with professional obligations.
The investigation began after a shareholder complaint lodged in March 2024 questioned aspects of Rajesh Exports’ financial reporting. SEBI subsequently opened a formal inquiry and appointed independent experts, including a forensic audit team, to review accounts and related transactions in greater depth.
Rajesh Exports has a diverse shareholder base that includes major domestic institutions and international investors. Its investors include India’s largest insurer, the Life Insurance Corporation of India (LIC), along with funds linked to global asset managers. Foreign investors collectively hold a meaningful minority stake, while the promoters retain majority control.
As the investigation advances, the case is likely to become one of the most closely watched corporate governance issues in India’s capital markets, underscoring intensified scrutiny of financial reporting standards, auditor accountability, and investor protection for listed companies.