Rajesh Exports-SEBI row: key numbers, next steps 2026

What triggered the dispute

Rajesh Exports Chairman and Managing Director Rajesh Mehta has denied allegations of fund diversion linked to the company’s battery subsidiary, ACC Energy Storage Pvt Ltd, and a promoter-controlled entity, Elest Pvt Ltd. Speaking to PTI on Tuesday, Mehta said there was “zero diversion of funds” and alleged that the regulator had not understood the accounting entries. The denial follows a June 3 ex parte interim order by the Securities and Exchange Board of India (SEBI) that flagged circular fund routing, non-transparent related-party arrangements, and disclosure deficiencies.

The controversy is not limited to regulatory proceedings alone. Rajesh Exports also faces the risk of being removed from the government’s Production-Linked Incentive (PLI) scheme for Advanced Chemistry Cell (ACC) battery storage, a programme valued at ₹18,100 crore. The Ministry of Heavy Industries (MHI), which administers the scheme, is examining SEBI’s findings before deciding on the next course of action, according to reports citing PTI.

What SEBI’s June 3 interim order alleged

SEBI’s interim order flagged a circular fund-routing pattern involving ACC Energy Storage and Elest Pvt Ltd after Elest acquired 49% of ACC Energy in January 2025. According to the order, Elest transferred ₹147 crore to ACC Energy, and ACC Energy returned ₹112 crore to Elest on the same day. SEBI also recorded that ACC Energy Storage invested ₹262 crore in Elest without disclosing valuation details.

The order further stated that the company’s managing director and chief financial officer admitted they were unaware of the transactions. SEBI concluded that the cross-holding arrangement diluted Rajesh Exports Ltd’s stake in ACC Energy from 100% to 51.05%, with 48.95% effectively transferred to Elest. SEBI described this as a “device, scheme and artifice to mislead investors”, and said it violated related-party disclosure rules and constituted fraudulent trade practices.

The larger allegation: subsidiary revenue misreporting

Beyond the ACC Energy-Elest transactions, SEBI’s broader 109-page order alleged significant misreporting of subsidiary revenues between FY21 and FY25. The regulator alleged that ₹1,515,000 crore of subsidiary revenues were misreported during the period, representing 99.8% of such revenues.

Following the interim order, SEBI barred Mehta from buying, selling, or dealing in Rajesh Exports securities until further proceedings are completed. The regulator also ordered a forensic audit.

Rajesh Exports’ rebuttal: “misreading of accounting entries”

Mehta has disputed SEBI’s conclusions, saying the regulator’s observations need to be “put in the right place” and reiterating that there was no diversion of funds. He told PTI the company is ready to clarify the accounting entries. In comments cited in the provided text, he also rejected allegations of money being routed through personal accounts or promoter-linked entities, and said no funds were taken by the promoter.

Rajesh Exports has also communicated to stock exchanges that SEBI’s order is interim in nature and does not contain conclusive adverse findings. Separately, a key part of the company’s rebuttal focuses on how the revenue inflation figure was derived. Mehta told PTI that SEBI took EBITDA figures and treated them as revenue. In its clarification to BSE and NSE, the company similarly stated that the issue emerged “primarily due to confusion”, alleging SEBI considered EBITDA of Valcambi instead of revenue, leading to an apparent discrepancy of about 97%. The company maintained that its consolidated revenue, as stated in its filings, is correct.

Why the ACC Battery PLI link matters

ACC Energy Storage is the vehicle through which Rajesh Exports proposed to execute battery manufacturing plans under the ACC PLI scheme, according to government documents cited in the provided text. As SEBI’s allegations relate to the same entities associated with the company’s lithium-ion cell business, they have become relevant for the government’s assessment of continued eligibility for incentives.

Reports citing PTI said the Ministry of Heavy Industries is likely to take a decision in the coming days on whether to remove Rajesh Exports from the beneficiaries list under the ACC battery storage PLI scheme. Another report quoted an MHI spokesperson telling ETAuto that “there have been no disbursements so far under the scheme”.

Scheme context: progress and participants cited

The provided text also referenced broader progress under India’s ACC Battery PLI scheme. It stated that the scheme has achieved 1 GWh of installed capacity against a targeted 50 GWh in nearly five years, with no incentives disbursed so far. The text listed ACC Energy Storage (Rajesh Exports’ subsidiary), Ola Cell Technologies, Reliance New Energy Battery Storage, and Reliance New Energy Battery among the entities associated with the scheme.

These details matter because the ACC PLI programme has been positioned as a cornerstone for building domestic battery capacity, and any action against a beneficiary may influence how stakeholders view governance standards and compliance requirements for participation.

Key figures and dates at a glance

Market impact and governance implications

The immediate regulatory impact described in the provided text is SEBI’s restriction on Mehta from dealing in Rajesh Exports securities until further proceedings, along with a forensic audit. The company’s position is that the order is interim and that it intends to clarify the issues raised, including the treatment of EBITDA versus revenue in SEBI’s calculations.

On the policy side, the potential removal from the ACC PLI beneficiary list is a material operational risk because ACC Energy Storage is tied to Rajesh Exports’ battery manufacturing plans under the scheme. The government’s review, as described in the reports cited, indicates that SEBI’s findings can have implications beyond securities enforcement, including eligibility for industrial incentives.

What to watch next

Rajesh Exports has said it is cooperating and, as per the provided text, plans to resubmit documents within 15 days to help clarify the matter. Meanwhile, the Ministry of Heavy Industries is examining the interim order and is expected to decide on the company’s status under the ACC PLI scheme in the coming days, according to PTI-cited reporting.

For investors, the next concrete milestones are the outcomes of SEBI’s forensic audit process and any further regulatory proceedings, alongside the government’s decision on whether Rajesh Exports remains a beneficiary under the ACC battery programme.

Conclusion

Rajesh Exports and Rajesh Mehta have rejected SEBI’s interim allegations covering ACC Energy-Elest transactions and subsidiary revenue reporting, arguing that the regulator misunderstood accounting entries and, in its revenue analysis, treated EBITDA as revenue. At the same time, SEBI’s interim order has triggered a forensic audit and a trading restriction on the promoter, while the government reviews whether the company should remain in the ₹18,100 crore ACC PLI scheme. The next developments are expected from the company’s proposed document resubmission within 15 days and the Ministry of Heavy Industries’ review decision in the coming days.