Rajesh Exports Hits Lower Circuit as SEBI Alleges ₹15.15 Lakh Crore Fraud, June 04

India’s capital markets regulator SEBI has accused Rajesh Exports of inflating revenues by ₹15.15 lakh crore over five years, marking one of the largest financial misrepresentation cases in Indian corporate history. The gold refiner and jewellery exporter saw its stock plummet 5% to ₹104.65 on the NSE on June 4, hitting the lower circuit. SEBI barred promoter Rajesh Mehta from trading in company securities and ordered a fresh forensic audit. The scandal raises questions about institutional investors, including Life Insurance Corporation of India, which holds a 10.8% stake.

How SEBI Uncovered the Alleged Fraud

A shareholder complaint in March 2024 raised concerns over large outstanding trade receivables. SEBI launched a formal investigation in October 2024 covering April 2020 to March 2024 and appointed forensic auditor BDO India Services. The audit found that 97-99% of reported revenues came from overseas subsidiaries, primarily Switzerland-based Valcambi. When BDO verified Valcambi’s actual revenues, they fell far short of consolidated figures, producing a ₹15.15 lakh crore mismatch across five financial years.

What the Regulator Found

SEBI’s 109-page interim order alleged large-scale financial misstatement, fund diversion through promoter-linked entities, and non-cooperation with investigators. The regulator flagged a claimed ₹1,035 crore investment in an Africa-based gold mine that auditors could not verify. SEBI said the company repeatedly failed to provide genuine financial records and adequate explanations for transactions. The findings were described as “egregious and unheard of” in the order issued on June 3.

Stock Collapse and Investor Impact

Rajesh Exports shares fell 5% to ₹104.65 on the BSE and ₹103.92 on the NSE on June 4, both hitting the lower circuit. The stock has lost 10% over the past week and is down 54% from its 52-week high of ₹239 in December 2025. Meyka rates the stock a B with a HOLD suggestion, though the grade reflects data before the SEBI action. Canara Bank sought to exit its ₹509 crore exposure to the company. LIC’s 10.8% stake, maintained since at least September 2023, now links policyholder funds to the scandal.

Political and Regulatory Fallout

Congress leaders flagged LIC’s substantial stake in Rajesh Exports, questioning whether the acquisition was driven by political influence. SEBI barred Rajesh Mehta from trading pending further investigation and directed the company to ensure accurate disclosures in financial statements and related-party transactions. The regulator also highlighted inadequate cooperation from the company’s statutory auditors. Promoter Rajesh Mehta has disputed the allegations.

Final Thoughts

Rajesh Exports faces existential regulatory scrutiny with a ₹15.15 lakh crore revenue fraud allegation. Meyka’s B grade and HOLD rating now carry heightened risk given the SEBI action, barring of the promoter, and LIC’s exposure. Investors should await the full forensic audit outcome.

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