India’s stock market has witnessed several major corporate scandals over the years, but the allegations surrounding Rajesh Exports in June 2026 stand out for their sheer scale. For many investors, it is difficult to comprehend how a company with a market capitalization of barely Rs.3,000 crore could be linked to alleged financial irregularities worth more than Rs.15 lakh crore.

The figure is staggering—equivalent to nearly 20% of India’s annual exports. However, according to regulators, this is not a case of cash disappearing from banks. Instead, it revolves around alleged accounting manipulation and inflated revenue reporting over several years.

SEBI Cracks Down on Promoter Rajesh Mehta

India’s market regulator, the Securities and Exchange Board of India (SEBI), has taken strict action against Rajesh Exports’ promoter and Chairman-cum-Managing Director, Rajesh Mehta.

In its interim order issued in June 2026, SEBI barred Mehta from participating in the securities market. The regulator also directed the National Financial Reporting Authority (NFRA) to examine the role of the company’s auditor, BSD & Co., which allegedly signed off on financial statements containing questionable figures over multiple years.

How the Investigation Began

The controversy first surfaced after a shareholder complaint was submitted to SEBI on March 11, 2024.

The complaint raised concerns about the company’s unusually high trade receivables—amounts reportedly outstanding for more than two years. In accounting, such prolonged unpaid receivables can signal serious collection issues or potential manipulation of financial records.

Following the complaint, SEBI initiated an investigation and appointed forensic auditors from BDO India in October 2024 to conduct an in-depth review of the company’s accounts. The probe has since become one of the largest corporate investigations in recent Indian history.

The Alleged Rs.15.15 Lakh Crore Revenue Mismatch

SEBI’s investigation found that between FY2021 and FY2025, Rajesh Exports reported that 97% to 99% of its consolidated revenue came from overseas subsidiaries.

A key entity in this structure is Valcambi SA, a Switzerland-based gold refinery acquired by Rajesh Exports years ago and considered the backbone of its international business operations.

However, when forensic auditors examined records of Valcambi and other foreign subsidiaries, they reportedly discovered significant discrepancies between the revenues disclosed in Rajesh Exports’ consolidated financial statements and the actual records maintained by these entities.

According to SEBI, the cumulative mismatch over five years amounted to approximately Rs.15.15 lakh crore. Regulators allege that a substantial portion of the sales reported on paper may never have existed in reality.

3 Methods Allegedly Used to Inflate Revenue

1. Network of Foreign Subsidiaries

The company allegedly relied heavily on overseas entities such as REL Singapore and Valcambi SA to project massive business volumes.

SEBI noted that when detailed accounting records, invoices and banking documents were sought from these subsidiaries, investigators faced difficulties obtaining complete information.

2. Circular Trading

Gold trading is known for its extremely high turnover and relatively low profit margins, often between 0.5% and 1%.

Investigators suspect that circular trading may have been used to artificially inflate revenue figures. In such arrangements, the same goods—or merely invoices—are repeatedly traded among related entities, creating the appearance of massive sales volumes without corresponding economic activity.

SEBI believes a large share of the company’s reported revenue may have originated from such transactions.

3. Questionable African Gold Mine Investment

In 2023, Rajesh Exports announced an investment of Rs.1,035 crore in gold mining projects in Africa.

However, auditors reportedly could not find evidence of this investment in either the parent company’s records or those of its subsidiaries, raising further questions about the transaction.

Company Funds and Personal Trading Allegations

Investigators also found evidence suggesting that company funds may have been transferred to accounts linked to promoter Rajesh Mehta.

Some of these funds were allegedly used for personal derivatives trading activities. Authorities reportedly identified suspicious transactions worth Rs.7.4 crore in personal accounts connected to Mehta, part of which was later returned to the company.

Canara Bank Loan Turns Into a Stressed Asset

The company’s financial troubles extend beyond regulatory scrutiny.

Canara Bank has reportedly classified Rajesh Exports’ Rs.509 crore loan exposure as a stressed asset after repayment difficulties. The bank is now preparing to recover dues through asset resolution and auction processes.

What Does It Mean for LIC and Retail Investors?

The fallout is not limited to promoters and lenders.

India’s largest insurer, the Life Insurance Corporation of India (LIC), holds a significant 10.8% stake in Rajesh Exports. As news of the allegations spread, the company’s stock hit the lower circuit limit, causing its market value to drop to around Rs.3,090 crore.

Any substantial erosion in the value of LIC’s investment could impact shareholder wealth and investor confidence, although the ultimate financial consequences will depend on the outcome of ongoing investigations and legal proceedings.

Company Denies All Allegations

Rajesh Exports has strongly rejected SEBI’s findings. In a statement filed with stock exchanges, the company said the regulator’s observations are based on an interim order and do not represent final conclusions. It maintained that its reported revenue figures are accurate and denied any inflation of turnover or financial misrepresentation.

What Happens Next?

The case now moves into the next phase of regulatory and legal scrutiny. The final forensic audit findings and SEBI’s eventual conclusions will determine whether the alleged Rs.15.15 lakh crore discrepancy was the result of accounting irregularities, reporting errors, or deliberate fraud.

For investors, the episode serves as a reminder that massive revenue figures alone do not guarantee a company’s financial strength. Transparency, cash flows, governance standards, and independent verification remain equally important when evaluating any business.