Rajesh Exports SEBI probe 2026: LIC’s 10.8% stake questioned

Why LIC’s holding has become a political and market issue

Congress on June 4 raised questions over Life Insurance Corporation of India’s (LIC) investment in Rajesh Exports Ltd after the Securities and Exchange Board of India (SEBI) alleged large-scale financial irregularities at the company. The opposition party pointed to LIC’s roughly 10.8% stake and argued that such exposure makes the allegations more consequential for public money. The development also comes against the backdrop of a sharp decline in Rajesh Exports’ share price over recent years. SEBI’s interim findings have added to concerns around disclosures, documentation, and corporate governance at the gold refining and jewellery company.

The episode matters for two reasons. First, SEBI’s interim order describes a possible misrepresentation of consolidated revenues over multiple years, which goes to the credibility of reported financial performance. Second, the presence of large institutional holdings, including LIC, brings scrutiny to how institutional investors evaluate governance risks, especially when the regulator flags non-cooperation during an investigation.

What SEBI has alleged in its interim findings

SEBI’s interim order dated June 3, 2026 outlined prima facie findings of financial misrepresentation, fund-routing irregularities, and non-cooperation during an ongoing investigation. The regulator said Rajesh Exports may have misrepresented consolidated revenues of around ₹1,515,000 crore between FY2021 and FY2025. SEBI stated this figure represented nearly 99.8% of the company’s total consolidated revenue during the period under review.

The regulator also flagged issues tied to the company’s reporting and disclosures. Among the items cited were alleged manipulation of books of accounts over multiple financial years beginning FY2021, inflation of revenues through transactions involving overseas subsidiaries, and incomplete or opaque reporting. SEBI also flagged a failure to disclose an investment of ₹1,035 crore in gold mining assets in Africa in the standalone financial statements of Rajesh Exports and its subsidiaries for FY2023, as referenced in the interim findings.

SEBI’s order also noted that the matter originated from a shareholder complaint received in March 2024, which flagged concerns over substantial trade receivables reflected in the company’s accounts.

Interim action: trading restrictions and investigation focus

As part of the interim action, SEBI barred Rajesh Exports’ promoter and CEO, Rajesh Mehta, from dealing in the company’s securities. Separately, reports on the order said SEBI questioned whether reported revenues were supported by adequate records and documentation.

The interim order is not a final adjudication, but it can shape near-term investor perception because it sets out the regulator’s current view based on investigation and forensic examination. SEBI also stated that shortcomings in information access and documentation prevented independent verification of a significant portion of the company’s transactions, according to details reported around the order.

Congress’s questions: “How was this fraud missed?”

Congress general secretary (communications) Jairam Ramesh described SEBI’s interim findings as pointing to a “gigantic scam” and asked how such alleged irregularities could have been missed. He highlighted that LIC owns around 10.8% of Rajesh Exports and questioned how the insurer failed to detect the alleged problems despite being a significant shareholder.

Ramesh also said the stake raises the question of whether LIC’s acquisition of such a “substantial stake” was driven by instructions from the “ruling ecosystem”. He further claimed that banks had considerable exposure to the company. These are political allegations and questions raised by the opposition; the material point for investors is that LIC’s holding has become a focal point in the public debate following SEBI’s action.

Shareholding snapshot: LIC and other large holders

Shareholding data for the March 2026 quarter shows LIC holds a 10.80% stake in Rajesh Exports. The holding has remained unchanged since at least September 2023, with no reported buying or selling during this period, according to the data cited in reports. Bridge India Fund was also reported to hold an 8.46% stake in the company.

The size and stability of LIC’s holding means the market is closely tracking mark-to-market impact. Reports said LIC’s stake value was around ₹637 crore at the beginning of 2026 and is currently worth about ₹347 crore, reflecting the stock’s fall over the period.

Stock reaction: Rajesh Exports slides, LIC also under pressure

The regulatory action triggered selling pressure in Rajesh Exports. Reports said the stock declined sharply after SEBI’s interim order, including a move of about 5% in one session, and also noted the shares fell about 1% at the close in a separate market update. Rajesh Exports was also reported to be down 78% from its five-year peak.

There was also some spillover into LIC’s own stock. LIC shares closed around 1% lower by the end of the day in the session cited, as investors assessed exposure and reputational risk linked to one of its portfolio companies.

Company response: denial of revenue overstatement

Rajesh Exports responded to the regulator’s findings by stating there was no overstatement of revenues in its financial statements, according to reports. The investigation remains ongoing, and SEBI’s interim order reflects the regulator’s prima facie view based on information gathered so far.

For investors, the key near-term variable is the extent to which the company can provide documentation and explanations that address the regulator’s questions around revenue recognition, overseas subsidiary transactions, and disclosures.

Key facts at a glance

Timeline: how the issue surfaced

Market impact and what investors are watching next

The immediate market impact has been higher risk perception around Rajesh Exports’ reported scale of operations, given SEBI’s claim that nearly all consolidated revenue in the reviewed period may be unsupported or misrepresented. That has a direct link to valuation because revenues and cash flow assumptions underpin earnings credibility and leverage capacity.

For institutional investors, the focus is also on governance signals. SEBI’s comments about non-cooperation and lack of access to records, as reported, can heighten concerns beyond one accounting line item because they speak to internal controls and auditability. For LIC, the situation adds scrutiny because the insurer is a large, long-term shareholder and its holding has been unchanged for an extended period.

Analysis: why the LIC angle changes the narrative

SEBI actions against listed companies are not unusual, but this case stands out due to the quantum of the alleged revenue misrepresentation and the prominence of institutional ownership. A holding of 10.80% makes LIC a meaningful shareholder, so the episode naturally draws questions about monitoring, engagement, and risk management, even though portfolio investing does not imply operational control.

The political angle raised by Congress is also likely to keep the story in headlines, which can affect sentiment and volatility. However, the investment case will ultimately depend on the investigation’s findings, the company’s ability to substantiate its disclosures, and any final regulatory directions.

Conclusion

SEBI’s interim order against Rajesh Exports and its promoter-CEO, coupled with allegations of misrepresented consolidated revenues of about ₹1,515,000 crore over FY2021-FY2025, has triggered sharp scrutiny of the company’s governance and disclosures. LIC’s 10.80% stake has become central to the debate, with Congress questioning how alleged irregularities went undetected and whether the investment was influenced by the “ruling ecosystem”.

The next milestones are SEBI’s further investigative steps and any additional disclosures or clarifications from Rajesh Exports as the process moves from interim findings toward a final outcome.