The Securities and Exchange Board of India (SEBI) has issued a 109-page interim order dated June 3, 2026 based on its investigation and forensic review which uncovered prima facie evidence suggesting that about 97-99% of the company's revenue may have been inflated. SEBI's interim order in the matter of Rajesh Exports Limited is available at https://www.sebi.gov.in/enforcement/orders/jun-2026/interim-order-in-the-matter-of-rajesh-exports-limited_101820.html
At page no. 94, the interim order reads:*It becomes all the more important for the regulator to step in at the right time and pass interim directions because if the same is not done, huge losses may be faced by gullible investors.Having regard to the prima facie findings recorded in this order, I am of the considered view that urgent ex parte interim directions are necessary for the following reasons:I.The violations prima facie established in this matter are not isolated or inadvertent but constitute a systematic and multi-year scheme of financial misrepresentation. The inflated consolidated revenues, the fictitious standalone transactions, incorrect consolidation, the misutilization of funds through personal accounts, and the opaque receivable adjustments are interlinked elements of a broader pattern of conduct designed to present a false financial picture to the market. "
SEBI, the market regulator has restrained promoter Mehta from buying, selling or dealing in securities of Rajesh Exports until further orders. It has also directed the firm to cooperate fully with investigators and make true and fair disclosures in its financial statements and related-party transactions. The regulator has instructed both Rajesh Exports and Mehta to fully cooperate with investigators and submit all requested documents and explanations within 30 days.
Notably, Rajesh Exports' shares saw a sharp 5% decline following the announcement. The shares of Life Insurance Corporation of India have fallen over 1%. LIC holds a 10.80% stake in the company. In it, Sebi whole-time member Kamlesh Chandra Varshney noted "approximately 97% to 99% of the revenues of the company are inflated, are egregious and unheard of."
This 97%-99% of Rajesh Exports' consolidated revenue came from overseas subsidiaries, particularly Switzerland-based Valcambi SA, a firm which disclosed negligible standalone revenues in its audited financial statements. Rajesh Exports has routinely avoided disclosure of its subsidiaries' financials in the public domain.
It is also noteworthy that Rajesh Exports Ltd also recorded Rs 114.87 billion in sales and Rs 114.88 billion in purchases with Affluence Shares and Stocks Private Limited. This company has denied participating in any such sales.
SEBI, the regulatory body for securities and commodity market in India is under the administrative domain of Ministry of Finance. It was established on April 12, 1988 as an executive body. It was given statutory powers on January 30, 1992 through the SEBI Act, 1992. The Act has been amended on 14 occasions. Out of these eight amendments have been carried out during 2014-2021.
SEBI Act was enacted "to provide for the establishment of a Board to protect the interests of investors in securities and to promote the development of, and to regulate, the securities market and for matters connected therewith or incidental thereto."
The term “securities” has the meaning assigned to it in section 2 of the Securities Contracts (Regulation) Act, 1956. "Securities" include (i) shares, scrips, stocks, bonds, debentures, debenture stock or other mark securities of a like nature in or of any incorporated company or other corporate;(ia) derivative;(ib) units or any other instrument issued by any collective investment sche the investors in such schemes;(ic) security receipt as defined in clause (zg) of section 2 of the Securitisation Reconstruction of Financial Assets and Enforcement of Security Interes 2002;(id) units or any other such instrument issued to the investors unde mutual fund scheme;(ii) Government securities;(iia) such other instruments as may be declared by the Central Government securities; and(iii) rights or interest in securities".
The issue regarding Rajesh Exports Ltd. came to light from a shareholder's complaint filed in March 2024, pointing out concerns over substantial trade receivables reflected in the company's accounts. In response, SEBI launched a probe into the complaint. It appointed BDO India Services as the forensic auditor.
The SEBI is constituted under section 3 of the Act. It was originally constituted under the Resolution of the Government of India in the Department of Economic Affairs dated the April 12, 1988.
By an amendment in the SEBI Act which came into effect from January 25, 1995. inserted bar on jurisdiction of courts under Section 20A. It reads: "No order passed by the Board or the adjudicating officer under this Act shall be appealable except as provided in section 15T or section 20] and no civil court shall have jurisdiction in respect of any matter which the Board or the adjudicating officer] is empowered by, or under, this Act to pass any order and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any order passed by the Board or the adjudicating officer by, or under this Act.
Section 22 of the Act reads: "All members, officers and other employees of the Board shall be deemed, when acting or purporting to act in pursuance of any of the provisions of this Act, to be public servants within the meaning of section 21 of the Indian Penal Code."
SEBI also directed the company to ensure accurate disclosures relating to financial statements, related-party transactions and other requirements under the Listing Obligations and Disclosure Requirements (LODR) regulations.
It took more than two years for the SEBI to issue it's interim order. So far no one knows as to why LIC invested in Rajesh Exports Ltd. SEBI has noted that there has been a significant misrepresentation of revenues spanning a five-year period from 2020-21 to 2024-25 that amounts ro a staggering Rs 15 lakh crore. It seems SEBI is yet to seek assistance from the Enforcement Directorate (ED), Ministry of Finance, which enforces the Foreign Exchange Management Act and the Prevention of Money Laundering Act (PMLA) and the Central Board of Direct Taxes (CBDT) to investigate further The ED and CBDT can initiate investigations if SEBI files a case under the PMLA, 2002.
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