Rajesh Exports said it will fully cooperate with the fresh forensic audit ordered by SEBI and has no plans to challenge the regulator’s interim order, even as it disputes allegations of non-cooperation during the investigation.
SEBI has flagged Bengalaru based gold jewellery firm Rajesh Exports Ltd (REL) for revenue inflation of over 15.15 lac crore from 2020-21 to 2024-2025 following an investor’s complain.
Earlier, SEBI had categorcially said that Rajesh Exports was not being co-operative to the market watchdog which was investigating the matter. Now, the Rajesh Exports owner Rajesh Mehta has said that they will not be challenging the SEBI order and has stressed that they will co-operate with SEBI’s investigation plus a fresh forensic audit as ordered by the market watchdog. Earlier, SEBI had said REL had denied forensic auditors access to its enterprise resource planning system, journal dumps and books of accounts,
“I would never agree with the fact that certain relevant documents have not been submitted by us. We have submitted everything we were asked for. SEBI has not found something; maybe we have missed out on something. All that will be reconciled now,” Rajesh Mehta has now reportedly told the media. . Rajesh Exports is run by Rajesh and his brother Prashanth. They are Gujaratis originally from Morbi whose family has settled in Karnataka. Rajesh Mehta was born also in Karnataka only. He is the biggest gold exporter of the world.
However, some investors who did not want to come on record claim that this decision by Rajesh Exports Limited has surprised them. “Why would they not want to defend themselves and proved SEBI wrong,” they wondered. “If SEBI was wrong before, it would be wrong now also”, they claimed.
In a startling revelation, the Securities and Exchange Board of India (SEBI), in its interim order issued last week, had alleged that gold refiner and jewellery major Rajesh Exports Ltd. (REL) may have overstated its consolidated revenue by an astonishing ₹15.15 lakh crore over a five-year period.
According to the market regulator, the bulk of these revenues were attributed to REL’s overseas subsidiaries, most notably Switzerland-based Valcambi SA, one of the world’s largest precious metals refiners. However, SEBI noted a glaring discrepancy: while REL’s consolidated accounts reflected massive revenues from these foreign entities, the audited standalone financial statements of Valcambi showed revenues that were only a fraction of the figures reported by the parent company.
The regulator observed that nearly the entire revenue base reported by REL appeared to originate from its overseas subsidiaries. Yet, the detailed financial statements of these entities were not publicly available to investors, analysts, or other stakeholders for independent scrutiny.
SEBI said this raises serious questions about transparency and disclosure standards. The regulator expressed concern that investors may have been presented with a distorted picture of the company’s true financial health and scale of operations. In its interim findings, SEBI stated that there was a prima facie case suggesting misrepresentation of REL’s financial position through the reporting of revenues that could not be reconciled with the audited records of its key overseas subsidiary.
The allegations strike at the heart of corporate governance and financial reporting norms, particularly because the purported inflation runs into trillions of rupees and spans multiple financial years. SEBI’s findings have sparked fresh concerns about the effectiveness of auditing, regulatory oversight, and disclosure practices in monitoring complex multinational corporate structures.
The matter remains under investigation, and the interim order represents SEBI’s preliminary findings rather than a final determination of wrongdoing.Mehta of Rajesh Exports who is known to stay away from media for over last three decades has attributed the gaps flagged by the regulator to the sheer volume of data — around 400 GB — maintained by the company, suggesting certain documents may have been difficult to locate rather than withheld.
He said REL has already begun furnishing documents sought under the interim order and expects to complete the exercise within five to six days.
In its interim order dated June 3, SEBI directed REL to cooperate with the investigating authority, submit requisite documents and explanations within 30 days, and make true and fair disclosures in its financial statements, related-party transactions and other filings.
On whether the company plans to legally contest SEBI’s directions, Mehta said there was no reason to do so.
“SEBI has all the authority and the right to keep asking us for documents for any number of years. There is no fine, no penalty, no coercive action in this order. Why should we challenge it?” Rajesh Mehta has been quoted.
He also noted that the trading restriction in the order applies to an individual and not to the company.
“The company has not been barred from doing anything,” he informed the media.
Mehta has been quoted saying that of the several thousand clarifications sought by SEBI over the past two-and-a-half years, only nine remain unresolved to the regulator’s satisfaction, of which the revenue inflation query is just one.
“All the other eight questions are minor. Even this ninth question is absolutely minor. SEBI has found certain things suspicious and needs more documents. SEBI has not made any allegations,” he said, adding that once the final order is issued, he is confident the conclusion will be favourable to the company.
Asked whether a final SEBI order imposing a penalty would be challenged, Mehta said: “I am confident there will be no adverse action in the final order once we provide all documents and explanations. But if an irrational final order is passed, we will definitely challenge it,” Rajesh Mehta has been quoted.
Also Read: SEBI Says Gujarati Businessman Hid ₹15 Lakh Crore From Gatekeepers and Regulators in India https://www.vibesofindia.com/did-rajesh-exports-hid-15-lac-crores-from-indian-regulators/
