SEBI Alleges Rs 15.15 Lakh Crore Revenue Inflation at Rajesh Exports; Auditors Under Scanner

The Securities and Exchange Board of India (SEBI) has alleged that Rajesh Exports significantly overstated its revenues over a five-year period from Financial Year 2020-21 to Financial Year 2024-25, which has been reflected in SEBI’s interim order.

According to SEBI, the company had misreported around Rs 15.15 lakh crore that was not supported by proper records. From the total misreported income, 97 to 99% has been said to have originated from its overseas subsidiaries, especially Swiss refiner Valcambi SA. However, SEBI discovered a large mismatch between the revenues reported by the subsidiary and those shown in the group’s consolidated financial statements.

The SEBI also strongly questioned the works of the company’s statutory auditors, PV Ramana Reddy & Co., and BSD & Co. The SEBI alleged that the auditors failed to identify several warning signs, including questionable transactions, inflated revenues, and improper accounting adjustments. It was further flagged that during the investigation, the company had failed to furnish important audit documents and working papers.

The investigation also emphasised transactions involving Affluence Shares and Stocks, where sales and purchases worth about Rs 11,487 crore allegedly lacked a genuine business purpose. SEBI further alleged that Rs 339 crore of company funds were shifted to promoter Rajesh Mehta’s personal accounts without the required approvals. The unverified investment worth Rs 1,035 crore in African gold mining projects was taken under the scanner.

Experts have compared the matter to past major corporate scandals due to its scale and the alleged audit failures. SEBI has restricted Rajesh Mehta from participating in the securities market till the investigation is ongoing in the present case, and further action may follow if the allegations are confirmed. The case has raised concerns about corporate governance and financial reporting standards.