SEBI Bans Rajesh Mehta: Rs 15.15 Lakh Crore Revenue Misrepresentation Alleged

SEBI Imposes Interim Ban on Rajesh Mehta Amid Revenue Misrepresentation Probe

India’s market regulator, the Securities and Exchange Board of India (SEBI), has issued an interim order banning Rajesh Mehta, the Chairman and Managing Director of Rajesh Exports, from dealing in the company’s securities. This significant regulatory action stems from alleged misrepresentation of approximately Rs 15.15 lakh crore in revenue over five financial years. The dispute primarily involves the accounting practices of Rajesh Exports’ overseas subsidiaries, particularly the Swiss refinery Valcambi SA, which the Indian gold giant acquired in 2015.

The investigation by SEBI was initiated following a shareholder complaint filed in March 2024, highlighting several critical concerns. These included revenue figures that could not be reconciled with Valcambi’s standalone accounts, a substantial lack of supporting documentation such as customer sales data and vendor details, and alleged irregularities in fund routing. The regulator specifically noted instances of corporate funds being transferred to Mehta’s personal bank accounts without proper approvals.

Core of the Accounting Discrepancy

At the heart of the revenue discrepancy is Rajesh Exports’ accounting treatment of Valcambi’s operations. While Valcambi’s audited standalone accounts primarily record processing charges as its revenue, Rajesh Exports reportedly claimed the full market value of the gold handled by the refiner as its own revenue. This method led to a significant divergence in reported figures; for example, in 2023, Valcambi’s standalone revenue was approximately Rs 543 crore, yet Rajesh Exports reported Rs 2.81 lakh crore for the same business chain.

SEBI has characterized this accounting approach as “internally inconsistent, commercially implausible and unsupported by verifiable records.” The regulator’s findings suggest a fundamental difference in how the company recognized revenue from its Swiss subsidiary compared to standard accounting practices and Valcambi’s own financial statements.

Company’s Denial and Further Allegations

Rajesh Exports has publicly denied any wrongdoing, stating that SEBI’s order is interim and that the revenue dispute arises from a “confusion” regarding its Swiss subsidiary’s revenue recognition. The company has maintained that its financial reporting is correct and has affirmed its commitment to engaging with the regulator to provide all necessary documents and clarifications.

Despite the company’s stance, the allegations have already impacted its market performance, with a noticeable fall in its stock price. Furthermore, Rajesh Exports faces the potential loss of eligibility under a critical production-linked incentive scheme. The corporate affairs ministry has also initiated a separate probe into potential governance lapses within the company, adding another layer of regulatory scrutiny.

Investigators also uncovered additional serious allegations. Rajesh Exports reportedly booked Rs 11,487 crore in sales to a broker named Affluence Shares and Stocks, which subsequently denied having any business dealings with the company. SEBI’s probe determined that these transactions were personal gold derivative trades conducted by Rajesh Mehta, which were then recorded as corporate sales. This suggests a blurring of lines between personal and corporate financial activities.

Moreover, bank records reviewed by the investigation revealed substantial financial transfers. Approximately Rs 338.90 crore from Rajesh Exports was transferred directly to Mehta’s personal accounts between April 2020 and September 2025. These transfers, allegedly made without proper corporate approvals, contribute to SEBI’s concerns regarding fund-routing irregularities and corporate governance.

Historical Context and Future Outlook

Rajesh Exports began as a family-owned jewellery trading company and grew into a global gold empire, significantly expanding its footprint after the acquisition of Valcambi SA in 2015. This acquisition was a pivotal moment in the company’s trajectory, transforming its scale and international operations.

The ongoing dispute with SEBI underscores the increased regulatory focus on corporate governance and financial transparency within India’s major listed entities. The outcome of SEBI’s interim order and the subsequent investigations will have significant implications for Rajesh Exports, its leadership, and potentially set precedents for revenue recognition and corporate fund management practices across the industry.