India’s capital markets regulator has launched a major enforcement action against gold exporter and refiner Rajesh Exports Ltd., alleging significant discrepancies in the company’s reported revenues and raising concerns about corporate governance, financial transparency, and fund management practices.
In an interim order issued this week, the Securities and Exchange Board of India (SEBI) stated that the Bengaluru-based company may have inaccurately reported approximately ₹15.2 trillion (around US$159 billion) in revenue generated through its subsidiaries over a five-year period ending March 2025. According to the regulator, the questioned amount represents nearly all of the revenue attributed to those entities during the period under review.
SEBI has directed the company to ensure that future financial statements and regulatory filings present a true and fair picture of its operations and financial position. The regulator also imposed restrictions on company chairman and majority shareholder Rajesh Mehta, barring him from trading in the company’s shares until further notice.
The order alleges that the reported figures may have created an exaggerated representation of the company’s business scale and financial health, potentially influencing investor perceptions. Following the regulatory action, shares of Rajesh Exports fell to their daily trading limit and have lost a substantial portion of their market value since the beginning of the year.
The case has attracted significant attention due to Rajesh Exports’ prominent role in the global precious metals industry. The company, which describes itself as one of India’s largest exporters of gold products, acquired Swiss precious metals refinery Valcambi in 2015 through a transaction valued at approximately US$400 million.
SEBI’s investigation reportedly uncovered concerns relating to the movement of corporate funds, transactions involving promoter-linked entities, and difficulties in tracing financial flows. The regulator noted that immediate intervention was necessary to safeguard corporate assets and protect investor interests while the investigation continues.
The order also places a spotlight on the responsibilities of auditors in identifying potential accounting irregularities. SEBI cited preliminary concerns regarding the conduct of the company’s statutory auditors, suggesting possible lapses in oversight and compliance with professional duties.
The probe began after a shareholder complaint filed in March 2024 raised questions about the company’s financial reporting practices. SEBI subsequently initiated a formal investigation and appointed independent experts, including a forensic audit team, to examine the company’s accounts and related transactions in greater detail.
Rajesh Exports has a diversified shareholder base that includes major domestic institutions and international investors. Among its investors are India’s largest insurer, Life Insurance Corporation of India (LIC), as well as funds associated with global asset management firms. Foreign investors collectively hold a significant minority stake in the company, while promoters continue to retain majority control.
As the investigation progresses, the case is expected to become one of the most closely watched corporate governance matters in India’s capital markets, highlighting the increasing scrutiny being applied to financial reporting standards, auditor accountability, and investor protection within publicly listed companies.
Disclaimer: This information has been collected through secondary research and TJM Media Pvt Ltd. is not responsible for any errors in the same.
