Rajesh Exports: The ₹15 Lakh Crore Revenue Misrepresentation Case

Rajesh Exports’ FY26 consolidated revenue stood at around ₹7.79 lakh crore, making it one of India’s largest listed companies by sales. But SEBI’s interim order has now raised serious questions over whether this revenue was properly supported, disclosed and verifiable.

SEBI alleged revenue misstatement of around ₹15.15 lakh crore during FY21-FY25. To put the scale in perspective, this is nearly 30% of India’s FY26 Union Budget expenditure of around ₹50.65 lakh crore.

The issue began with a shareholder complaint dated March 11, 2024, alleging possible financial misrepresentation, mainly around large trade receivables outstanding for over two years.

SEBI also estimated that the fall from peak market cap led to around ₹27,999 crore erosion in total market value, including around ₹12,726 crore erosion in public investor wealth.

What does Rajesh Exports do and how does it earn money?

Rajesh Exports is mainly involved in:

• Gold refining and bullion-related activities
• Manufacturing of gold products
• Export and wholesale sale of gold products
• Retail jewellery sales through SHUBH Jewellers

In such businesses, reported revenue can look huge because it includes the value of gold, but the real economic earning is usually the value-added part, like refining margin, processing fee, trading spread or making charges.

What is the fiasco all about its subsidiaries?

• On paper, Rajesh Exports reported consolidated revenue of around ₹15.45 lakh crore during FY21-FY25. But according to SEBI, around ₹15.15 lakh crore was allegedly misrepresented, which was nearly 99.8% of the revenue attributed to subsidiaries and step-down subsidiaries.
   
• In FY25, consolidated revenue was ₹4.2 lakh crore, while standalone revenue was only ₹7,027 crore. That means around 98.3% of revenue came from subsidiaries. In FY26, consolidated revenue further increased to ₹7.79 lakh crore, while standalone revenue was ₹9,189 crore. 
   
• The profit dependence was also visible. In FY25, consolidated PAT was ₹95 crore, against standalone PAT of ₹24 crore. While in FY26, consolidated PAT was ₹113 crore, against standalone PAT of ₹32 crore. 
   
• SEBI alleged that Rajesh Exports did not upload financial statements of key subsidiaries such as REL Singapore, Global Gold Refineries AG (GGR), Valcambi SA, Bab Al Rayan Jewellery LLC, Valcambi USA Inc and ACC Energy Storage. It rejected the company’s argument that subsidiary numbers were “derivable” from consolidated accounts, as consolidated numbers can hide entity-level risks, cash flows, related-party transactions and intra-group adjustments.

The Valcambi Mismatch: SEBI’s core allegation of revenue inflation

Rajesh Exports became a global gold refining player after acquiring 100% stake in Valcambi, a Switzerland-based precious metals refiner, in an all-cash deal worth around US$400 million.

Valcambi is among the world’s largest precious metals refiners. At the time of acquisition, it had processed and sold an average of around 945 tonnes of gold and 325 tonnes of silver per year over the previous three financial years. Its annual gold throughput was even higher than India’s annual gold consumption.

But the concern was not Valcambi’s scale. It was the revenue mismatch.

Rajesh Exports said Valcambi SA was the main operating company in its overseas structure. However, Valcambi’s audited standalone revenue was only a few hundred crores, while Rajesh Exports was reporting consolidated revenue in lakhs of crores.

Period	Valcambi audited revenue	Rajesh Exports consolidated revenue
CY20 / FY21	₹586 cr	₹2.58 lakh cr
CY21 / FY22	₹729 cr	₹2.43 lakh cr
CY22 / FY23	₹743 cr	₹3.40 lakh cr
CY23 / FY24	₹543 cr	₹2.81 lakh cr
CY24 / FY25	₹427 cr	₹4.23 lakh cr

Valcambi SA sits at the bottom of the group structure. GGR owns it, REL Singapore holds 95% in GGR, and Rajesh Exports holds the remaining 5%.

In simple terms:

Rajesh Exports → REL Singapore → GGR → Valcambi SA

(Source - SEBI)

Rajesh Exports explained that Valcambi recorded only processing and value-addition revenue, while GGR recorded the full value of gold transactions. But SEBI questioned this because GGR was described as a holding company with no day-to-day operations.

If Valcambi was the main operating company and reported only a few hundred crores of revenue, how did GGR and Rajesh Exports report lakhs of crores of revenue?

SEBI pointed out that the company did not provide enough supporting records like customer details, vendor details, invoices, purchase records and inventory trail to justify this. That is why SEBI treated the Valcambi-GGR mismatch as a major revenue recognition red flag.

The consolidation process itself was questioned

Rajesh Exports said the audited financials of overseas entities were first consolidated at REL Singapore and then sent to Rajesh Exports. But SEBI found that REL Singapore had prepared only standalone financial statements, not consolidated accounts. REL Singapore also claimed exemption from consolidation, arguing that Rajesh Exports, as the ultimate holding company, was already doing it.

SEBI further noted that GGR’s consolidated financial statements were not statutory audited under Swiss law, while Valcambi’s standalone financials were audited by KPMG SA. REL Singapore reported nil revenue from operations during FY21-FY23, and ACC Energy had nil or negligible revenue during the relevant period.

The question SEBI was asking was simple: if REL Singapore did not consolidate, GGR's numbers were not statutory audited, and Valcambi's audited revenue was only a few hundred crores, how reliable was the consolidation behind lakhs of crores of reported revenue?

SEBI’s estimate of alleged revenue misrepresentation

SEBI calculated the alleged misrepresentation by comparing subsidiary-level revenue with Valcambi’s audited standalone revenue, and concluded that Rajesh Exports had materially overstated its operational scale and consolidated performance during FY21-FY25.

(Source - SEBI)

Non-cooperation with forensic audit

SEBI also flagged serious non-cooperation during the forensic audit. According to SEBI, the forensic auditor was not given access to the company’s ERP system, books of accounts and journal dump, which limited independent scrutiny of the accounting entries.

The forensic auditor’s transaction testing also faced major documentation gaps.

Sample tested	Complete documentation available
Selected sample of ₹7,021.36 crore	Only 2.03%
Sales sample of ₹12,217.15 crore	Only 35.07%

Trade receivables: another major red flag

SEBI noted that around 98-99% of REL’s standalone trade receivables during FY22-FY24 were concentrated in four overseas entities:

Debtor	FY24	FY23	FY22
Al Jameelat Jewellery LLC	₹2,035 cr	₹2,571 cr	₹2,296 cr
ESG Edelmetall Handel GmbH & Co	₹207 cr	₹200 cr	₹179 cr
Al Sultan Jewellery LLC	₹121 cr	₹311 cr	₹287 cr
Aurofin SA	₹111 cr	₹873 cr	₹2,094 cr
Total	₹2,473 cr	₹3,956 cr	₹4,857 cr
% of total standalone trade receivables	98%	99%	99%

SEBI also noted that some recoveries were not received through normal banking channels, but were claimed to be settled through supplies of gold.

If receivables are concentrated with a few parties and settled through non-cash adjustments, investors cannot easily judge the real quality of sales and cash conversion.

Fund routing and misutilisation

SEBI did not only question Rajesh Exports’ revenue. It also raised concerns about how company funds allegedly moved through the promoter's family and related entities.

Allegation 1: Funds routed through Rajesh Mehta’s personal accounts

Between April 1, 2020 and September 30, 2025, Rajesh Exports transferred ₹338.90 crore to promoter Rajesh Mehta, while only ₹232.44 crore came back to the company.

SEBI alleged that large company funds moved through his personal bank accounts without clear commercial rationale, approval or transparent disclosure. It also noted that such transfers could benefit him through interest income and hurt shareholders.

Allegation 2: Personal gold-derivative trades through Affluence broker were shown as company transactions

SEBI found that Rajesh Exports transferred ₹7.45 crore to Rajesh Mehta, which he used to trade in gold derivatives through his personal account with Affluence Commodities. The trades led to a loss of ₹3.50 crore. Later, Affluence refunded ₹3.94 crore to Rajesh Mehta, of which around ₹3.91 crore came back to Rajesh Exports.

The bigger issue was that Affluence told SEBI it had no relationship with Rajesh Exports at all. No client agreement, no contract, no transactions.

Despite this, Rajesh Exports recorded sales of ₹11,486.60 crore and purchases of ₹11,488.42 crore with Affluence during FY22-FY24.

SEBI’s concern was that trades done through Rajesh Mehta’s personal account were reflected in Rajesh Exports’ books as large company-level sales and purchases.

Allegation 3: Transactions with Siddharth Mehta were not disclosed as related-party transactions

SEBI also noted transactions with Siddharth Mehta, son of Rajesh Mehta.

During April 1, 2020 to September 30, 2025, REL transferred ₹21.25 crore to Siddharth Mehta, while only ₹5.79 crore came back to the company. The net transfer stood at ₹15.46 crore.

SEBI flagged that the transactions with Siddharth Mehta were not disclosed as related-party transactions.

Allegation 4: Company expenses routed through personal accounts and credit cards

REL said some payments through Siddharth Mehta were for operational expenses, statutory dues and credit card payments. But SEBI questioned why listed-company expenses were routed through the personal bank accounts and credit cards of someone who had no formal role in the company.

SEBI’s concern was that company expenses should be paid through proper company accounts, not through personal accounts or cards of promoter-family members.

Allegation 5: Elest entered ACC Energy through fresh share issue, reducing REL’s stake

ACC Energy was earlier a 100% subsidiary of Rajesh Exports. Later, ACC Energy issued fresh shares, where Rajesh Exports subscribed to 2.55 crore shares at ₹60 per share and Elest subscribed to 2.45 crore shares at the same price.

As a result, Rajesh Exports’ stake in ACC Energy reduced from 100% to 51.05%, while Elest, a promoter-linked entity, acquired 48.95%.

SEBI alleged the fund movement between the two entities. Elest transferred ₹147 crore to ACC Energy, while ACC Energy transferred ₹112 crore back to Elest on the same date. Separately, Rajesh Exports disclosed that ACC Energy invested ₹262 crore in Elest during FY25, but SEBI noted that details such as valuation, stake acquired and investment terms were not available.

SEBI treated this as important because Elest was a promoter-linked entity, and the transaction gave it nearly 49% ownership in ACC Energy.

In simple words, a promoter-controlled entity got 48.95% ownership in ACC Energy through opaque cross-holdings and fund movements, while key details such as approvals, valuation, stake acquired, investment terms and business purpose were not clearly disclosed.

Allegation 6: Senior management claimed lack of awareness

SEBI further noted that REL’s Managing Director and CFO said they were unaware of the ₹147 crore investment by Elest in ACC Energy and the ₹262 crore investment by ACC Energy in Elest.

This raised a bigger governance question: if such large transactions happened between group/promoter-linked entities, how were key management personnel unaware?

Allegation 7: Unclear “gold mines in Africa” investment

SEBI also questioned Rajesh Exports’ large investment claim. The company’s consolidated Other Non-Current Investments rose from ₹879.60 crore in FY21 to ₹1,035.27 crore in FY23, and then sharply to ₹10,547.72 crore in FY25.

When NSE asked about the ₹1,035.27 cr investment in FY23, Rajesh Exports linked it to gold mines in Africa. SEBI said this could not be verified from the financial statements.

SEBI also noted that while REL claimed ₹7,745.42 crore of investments were recorded in GGR during 2017-2024, GGR’s consolidated financial assets were not more than ₹10.14 crore till CY23. SEBI could not clearly verify where the money was invested, what asset was acquired, and how it appeared in the group’s financials.

What investors can learn from this case

• If most of the business sits in foreign subsidiaries, demand clear subsidiary financials, cash flows and transaction-level disclosures. If 80-90% of revenue comes from subsidiaries, those entities are effectively the real business.
• Always compare standalone and consolidated numbers. A large gap between the two tells you where the actual revenue, profit and risks are sitting.
• Watch receivables closely. If sales are flat but receivables keep rising, cash is not coming in. Receivables below 10-15% of annual sales are usually manageable. But if receivables move above 25-30% of sales, it means a large part of reported revenue is still stuck as unpaid customer dues.
• Also track CFO/PAT conversion closely. A healthy business should ideally convert 80-100% of PAT into operating cash flow over a 3-5 year period. If the ratio stays below 50% for multiple years, it means profits are not turning into real cash. A consistently weak or negative CFO/PAT ratio is a serious red flag, especially in a low-margin trading business.

At Finology 30, we never bet on companies that cannot pass these basic forensic checks.

If a company has a complex structure or receivables are piling up, we stay away, as we prefer capital safety over chasing the next multibagger story.