Rajesh Exports: SEBI flags ₹1,515,000 crore gap (FY21-25)

What SEBI’s interim order alleges

SEBI has passed an interim order against Rajesh Exports and its promoter Rajesh Mehta, alleging major discrepancies in the company’s reported revenues. The regulator has questioned the revenues that underpinned nearly all of the group’s consolidated sales over the last five financial years. SEBI’s interim findings also cite missing records and non-cooperation during its verification process. Based on these observations, the regulator has barred the company and its promoter from accessing the securities markets through the interim order. SEBI has emphasised that its observations are interim at this stage, and the investigation remains ongoing.

The headline number: revenue mismatch across FY21 to FY25

At the centre of the order is SEBI’s allegation that Rajesh Exports may have misrepresented about ₹1,515,000 crore of revenue between FY21 and FY25 through overseas subsidiaries and step-down subsidiaries. The regulator has described the alleged mismatch as spanning nearly the entire revenue reported at the consolidated level. In the material cited, SEBI’s preliminary estimate suggests that revenue attributed to subsidiaries may not have been adequately supported by underlying records. The regulator has stopped short of a final conclusion, but the figure has become the core reference point for the interim action.

How the issue surfaced: complaint and probe trail

SEBI’s review traces back to a complaint received in March 2024. The complaint, filed by a shareholder of Rajesh Exports Limited, alleged potential financial misrepresentation in the company’s books. The focus of the complaint included a large sum of trade receivables said to be outstanding for more than two years. Over time, this complaint culminated in a detailed interim order. The order outlines alleged deficiencies in disclosures related to subsidiaries, and it records SEBI’s difficulty in verifying a significant portion of overseas operations. The regulator has also cited non-cooperation during the probe.

Where the revenues were reported: subsidiaries dominate consolidated sales

SEBI’s interim assessment states that between FY2020-21 and FY2024-25, nearly 97 to 99 percent of the group’s reported revenue came from overseas subsidiaries rather than the Indian listed entity. In another summary of the regulator’s allegation, the questioned revenue accounted for about 99.8 percent of reported consolidated revenue during the period. The order notes consolidated revenue of about ₹1,545,000 crore reported between FY21 and FY25. Of this, SEBI says around ₹1,518,000 crore, or roughly 97 to 99 percent, was attributed to subsidiaries and step-down subsidiaries. Based on its analysis, SEBI has alleged that approximately ₹1,515,000 crore of that subsidiary-attributed revenue may have been misrepresented.

Valcambi comparison: audited revenue versus group consolidation

SEBI has pointed to a mismatch involving Swiss subsidiary Valcambi SA to illustrate its concern. The regulator said Valcambi SA’s audited standalone revenue for calendar year 2023 was ₹542.68 crore. In contrast, GGR reported consolidated revenue of ₹293,000 crore and Rajesh Exports reported consolidated revenue of ₹281,000 crore for the same broad period referenced by the regulator. SEBI’s view is that such gaps raise fundamental questions about how the group’s revenues were consolidated and presented to investors. The order frames this as a key indicator supporting its interim concerns about the reliability of the revenue trail.

Gross versus income: SEBI’s view on revenue recognition

A central element in SEBI’s interim reasoning is its view that revenues may have been recorded on a gross basis. In that framing, the full value of gold transactions may have been counted as revenue, rather than recognising only the refining or processing income actually earned. SEBI’s order presents this as one possible contributor to the scale of the mismatch it believes exists. The regulator, however, has not treated this as a settled accounting conclusion in the interim stage. Instead, it has used it to support its claim that the subsidiary-attributed revenue may not be supported by adequate underlying records.

Interim restrictions: market access barred

Following the June 3 interim order, SEBI barred Rajesh Exports and its promoter-chairman Rajesh Mehta from accessing the securities market. The interim order’s basis, as described in the material, is the alleged mismatch and the regulator’s concerns around verification, records, and cooperation. SEBI’s action is positioned as a temporary, preventive measure while the investigation continues. The regulator has stated that its findings remain interim observations.

Company response: “communication gap” and interim nature stressed

A day after SEBI’s interim order, Rajesh Exports said the issue stemmed from a “communication gap and confusion” between the company and SEBI. In an exchange filing, the company said the order was interim and that “no adverse” conclusion had been reached. It maintained that its reported revenues were “correct” and “not overstated”. Separately, Rajesh Mehta told Moneycontrol on June 4 morning, “It is an interim order and nothing in it is true.” In an interview referenced in the material, Mehta also defended the company by saying SEBI officials had confused gross profit with revenue, and reiterated that no conclusion had been reached.

Key figures and dates at a glance

Why the interim order matters for investors and disclosures

The interim order matters because it questions the basis of revenue that SEBI says dominated the group’s consolidated financial statements. When a regulator indicates that 97 to 99 percent of consolidated revenue is linked to overseas entities and then questions the supporting records, it directly affects how investors assess reported scale and operations. The Valcambi comparison is important in SEBI’s narrative because it contrasts audited standalone numbers with much larger consolidated figures. SEBI has also pointed to missing records and non-cooperation as barriers to verification, which strengthens the regulator’s case for interim restrictions.

What to watch next

SEBI has stated that the investigation remains ongoing following the interim order. The regulator has also said its current findings are interim and not final conclusions. Rajesh Exports has said it will contest the allegations and has reiterated that its revenues were correctly reported. The next key developments will come from SEBI’s continuing investigation and any further filings or responses from the company as the process moves forward.