India's markets regulator, the Securities and Exchange Board of India (SEBI), has barred Rajesh Mehta, the promoter and chairman of gold retailer Rajesh Exports, from the securities market. In an interim order issued June 3, SEBI also mandated a forensic audit of the company, alleging it misrepresented roughly $158 billion in revenue — 99.8% of what it reported over five fiscal years — by booking customer-owned gold as its own.
The scale of the alleged misrepresentation
SEBI's order covers the period from FY2020-21 through FY2024-25. The regulator claims Rajesh Exports attributed almost all of its revenue to overseas subsidiaries but failed to provide independent audit evidence. Auditors flagged that Valcambi, a Swiss subsidiary, reported less than 0.5% of the group's claimed total revenue in its own audited accounts. The company had refused to share subsidiary records, citing Swiss privacy laws, but SEBI rejected that justification.
How the revenue was booked
According to SEBI, Rajesh Exports booked the full gross value of gold refined and processed for customers as its own sales, rather than just the processing fee it actually earned. That practice inflated the company's revenue by the value of the gold itself, which never belonged to the group. The regulator alleges that from FY2020-21 to FY2024-25, this amounted to roughly $158 billion of misstated revenue.
Questionable transactions and personal trading
SEBI also flagged about $1.3 billion in transactions with a broker named Affluence Shares. When investigators asked the broker about the dealings, Affluence denied that Rajesh Exports was ever a client. Separately, the regulator alleges that company funds were diverted to Mehta's personal account for unauthorized derivative trading, without board approval.
Company's response and market fallout
Rajesh Exports has denied any wrongdoing. The company said its revenues comply with accounting standards and blamed the discrepancies on a 'communication gap' between itself and its auditors. On June 4, the day after the order, shares of Rajesh Exports hit a lower circuit at ₹104 ($1.09). Life Insurance Corporation of India holds a 10.8% stake in the company. The probe originally stemmed from a shareholder complaint filed in March 2024 about unexplained trade receivables.
What happens next
SEBI has called for a forensic audit to be completed within 45 days. Mehta remains barred from the markets until further notice. The company is expected to file its response to the interim order, but no hearing date has been set yet. The unresolved question is how much of that $158 billion in revenue will be restated, and whether other subsidiaries besides Valcambi will face scrutiny.
