SEBI flags ₹15 lakh crore gaps at Rajesh Exports

A family that buys an LIC policy rarely imagines its savings touching a gold refinery in Switzerland. Yet that is why the Rajesh Exports case feels larger than one company.

SEBI has accused Rajesh Exports Limited of inflating revenue by ₹15.15 lakh crore between FY21 and FY25. That figure is so large it almost stops sounding real.

The company denies wrongdoing. Its chairman, Rajesh Mehta, says Rajesh Exports will cooperate with the regulator and will not contest the interim order.

What SEBI has alleged

SEBI issued a 109-page interim order dated June 3. An interim order means the case is still open. It is not a final guilty verdict.

The regulator has restrained Rajesh Mehta from dealing in Rajesh Exports shares until further orders. SEBI has also asked the company to cooperate with investigators and forensic auditors.

The central allegation is simple, though the accounting is not. SEBI says Rajesh Exports showed a much larger business than its records could support.

The regulator has flagged alleged inflated revenue, weak disclosures, fund movement through promoter-linked entities, and poor cooperation during the probe.

Why the numbers looked odd

Rajesh Exports reported consolidated revenue of ₹4.23 lakh crore in FY25. Its profit after tax was only ₹95 crore.

Put simply, for every ₹100 of sales, the company kept around two paise as profit. Commodity businesses can run on thin margins, but this thin a margin demands very clear books.

SEBI says 97% to 99% of the company’s consolidated revenue came from overseas subsidiaries, mainly Valcambi, its Swiss refiner.

The regulator’s problem is this. It says Valcambi earned processing fees, not full gold-sale revenue, in many transactions. That means it refined gold for customers without owning the gold.

If a tailor stitches your cloth, he counts the stitching fee as income. He does not count the full price of your cloth as his sale.

Rajesh Exports says SEBI misunderstood the business. The company argues Valcambi refines and sells bullion to banks, central banks, and large bullion players.

It has also said the regulator mixed up revenue with EBITDA. EBITDA is money left before interest, tax, and some accounting charges.

LIC exposure worries small savers

For ordinary readers, the LIC angle is the emotional centre of this story. LIC holds 10.80% in Rajesh Exports, based on the latest shareholding data cited in market disclosures.

That does not mean policyholders have lost money. It does mean a public insurer, trusted by millions of households, has exposure to a company under a serious regulatory cloud.

Rajesh Exports shares fell after SEBI’s order. LIC shares also slipped over 1%, as investors connected the dots.

This is how market risk travels. A corporate accounting dispute starts in one listed company. Then it touches an insurer, a bank, and finally a household saver.

Canara Bank also has a separate recovery history with Rajesh Exports. Its chief executive Brajesh Kumar Singh said the bank had ₹509 crore of crystallised debt and had recovered around ₹303 crore.

He said the exposure was fully provided for. In plain English, the bank has already set aside money for possible loss.

The transactions under scrutiny

SEBI has questioned transactions with Affluence Shares and Stocks. Rajesh Exports recorded sales worth ₹11,487 crore to the brokerage firm between FY22 and FY24.

That amount formed a large part of the company’s standalone revenue for that period. SEBI says Affluence told investigators it had not done business with Rajesh Exports.

The regulator then traced the trades. It alleged they were personal gold derivative trades by Rajesh Mehta, later recorded as company sales.

A gold derivative is a contract linked to gold prices. It is not the same as selling jewellery or bullion from a factory.

SEBI also alleged that ₹338.90 crore moved from Rajesh Exports to Mehta’s personal accounts between April 2020 and September 2025.

The order also refers to gold mine investments worth ₹1,035 crore. These details will matter because investigators now need documents, not explanations alone.

Rajesh Exports pushes back

Rajesh Exports has rejected SEBI’s conclusions. The company says the order is interim and contains suspicions, not final findings.

Mehta has said the company has shared 40,000 to 50,000 documents and more than 300 GB of data with SEBI.

He also said neither the company nor its personnel committed wrongdoing or misrepresented facts. The company insists its reported revenues are correct.

That defence now faces a hard test. If Rajesh Exports’ explanation is right, it must show clean records across subsidiaries, auditors, and bank trails.

If SEBI’s reading stands, the case could become one of India’s most startling accounting episodes. Not because of one dramatic trade, but because of scale.

The old Harshad Mehta comparison is tempting, especially in Gujarat and market circles. But this case is different, and it remains under investigation.

The lesson for investors is still familiar. Big revenue is not enough. A company must show where the money came from, who paid it, and where it went.

For small shareholders and LIC policyholders, the next few months matter. The real question is not whether Rajesh Exports can sound convincing. It is whether its books can speak clearly when SEBI, auditors, banks, and the market all look at the same pages.