Case Details

Entity Involved: Rajesh Exports Limited (REL) and Rajesh Mehta (Promoter, Executive Chairman, Director)

Order Number: WTM/KV/CFID/CFID-SEC6/32431/2026-27

Date of Issuance: June 03, 2026

Investigation Period: April 01, 2020 to March 31, 2024 (with references to periods outside this range)

Financial Impact: The interim order identifies prima facie misrepresentation of approximately INR 15,15,385 crore in consolidated revenues (99.8% of subsidiary revenues) during FY 2020-21 to FY 2024-25, and misrepresentation of INR 12,557 crore in standalone revenues (64.53% of total) during FY 2020-21 to FY 2023-24. Additionally, INR 338.9 crore was transferred to Mr. Rajesh Mehta's personal accounts.

Persons Involved

  • Rajesh Mehta: Promoter, Executive Chairman, Director, and Audit Committee member of REL. PAN: ADKPM0172C. Described in depositions as the key decision-making authority controlling day-to-day affairs and financial operations of REL and its subsidiaries.
  • Suresh Gowda: Managing Director of REL.
  • Vijendra Rao: Chief Financial Officer (CFO) of REL.
  • CA P V Ramana Reddy: Proprietor at M/s P V Ramana Reddy & Co, Statutory Auditor of REL.
  • CA P L Venkatadri: Partner at M/s BSD & Co, Statutory Auditor of REL.
  • Michael Mesaric: Chief Executive Officer of Valcambi SA (subsidiary).

Violations and Allegations

Summary of Violations: SEBI's prima facie findings allege widespread and systematic violations of securities laws by REL and Mr. Rajesh Mehta.

Key Regulations Cited: SEBI Act, 1992 (Sections 11, 11B, 11C, 12A); SEBI (PFUTP) Regulations, 2003 (Regulations 3(b),(c),(d), 4(1), 4(2)(e),(f),(k),(r)); SEBI (LODR) Regulations, 2015 (Regulations 4, 23(2), 33, 34, 46, 48); Companies Act, 2013 (Sections 128(1), 136(1)); Indian Accounting Standards (Ind AS 1, 21, 24, 32, 107, 110, 115).

Specific Allegations:

  • Non-Cooperation & Non-Disclosure: Systematic non-cooperation with SEBI and the appointed Forensic Auditor (BDO India). Failure to provide access to ERP systems, complete books of accounts, and journal dumps. Failure to upload audited financial statements of any subsidiaries/step-down subsidiaries on its website, violating Regulation 46(2)(s) of LODR and Section 136(1) of Companies Act. Withheld information on foreign subsidiaries (Valcambi SA, GGR) citing Swiss Data Protection laws, which SEBI found untenable.
  • Misrepresentation of Consolidated Financials: Inflated consolidated revenues by ~INR 15.15 lakh crore over 5 years. Over 97% of consolidated revenue came from subsidiaries, primarily Valcambi SA. However, Valcambi's audited standalone revenue represented less than 0.5% of the consolidated revenue reported by REL and GGR. REL relied on unaudited consolidated figures from GGR (a holding company) which included gross transaction values, while the operating entity (Valcambi) only recorded processing fees. This accounting treatment was deemed commercially implausible and unsupported. Failed to provide underlying party-wise data (customers, vendors) for verification.
  • Misrepresentation of Standalone Financials:
  • Fictitious Transactions with Affluence: Recorded non-genuine sales and purchases (~INR 11,487 cr each) with Affluence Shares & Stocks Pvt Ltd, which constituted 66.02% of standalone sales and 67.11% of purchases from FY22-FY24. These transactions matched derivative trades executed by Mr. Rajesh Mehta in his personal account. Affluence denied any relationship with REL. Funds were routed through Mr. Mehta's account.
  • Incorrect Accounting Treatment: Included foreign exchange fluctuations (INR 866.6 cr in revenue, INR 716.18 cr in purchases) and interest income (INR 204 cr) within Revenue from Operations, violating Ind AS 21 and Ind AS 115, inflating turnover.
  • Unsupported Purchases: Recorded purchases from Vienna Multiventures (INR 42.54 cr) and Harshil Enterprise (INR 16.46 cr) without adequate supporting documentation.
  • Incorrect Consolidation: Failed to eliminate intra-group investments (INR 2,501.12 cr) and intra-group trade payables (INR 1,456.77 cr) in consolidated financial statements, inflating the balance sheet, violating Ind AS 110.
  • Unverifiable Investment Claims: Claimed "Investment in Gold Mines in Africa" valued at INR 1,035.27 cr (FY23) under "Other Non-Current Investments" but failed to substantiate this claim in any financial statements.
  • Incorrect Receivable Adjustments: Artificially reduced long-outstanding trade receivables (INR 2,914.07 cr) through opaque netting arrangements against trade payables without legal enforceable rights or proper disclosures, violating Ind AS 1 and Ind AS 32.
  • Misutilization of Funds & Non-Disclosure of RPTs: Routed company funds through personal bank accounts of promoter Rajesh Mehta (INR 338.9 cr out, INR 232.44 cr in) and his son Siddharth Mehta (INR 21.25 cr out, INR 5.79 cr in) without disclosure or Audit Committee approval. Transferred funds to related party Elest Pvt Ltd (INR 565.88 cr net outflow INR 215.85 cr) with inadequate disclosures. Complex cross-holdings between REL, ACC Energy, and Elest were not transparently disclosed. Violated Ind AS 24 and LODR Regulations.
  • Obstruction of Investigation: Furnished materially inconsistent and contradictory data across multiple submissions (e.g., sales figures to SEBI), impeding verification.
  • Market Impact: The alleged misrepresentations created a misleading appearance of financial health, influencing investor decisions. REL's market cap peaked at ~INR 30,364 cr (Feb '23) before declining to ~INR 2,365 cr (Apr '26), eroding an estimated INR 12,725 cr of public investor wealth.

Penalties, Settlement Terms & Rulings

This is an Interim Order. No final monetary penalties or settlement terms are imposed at this stage. The order contains prima facie findings and directs further investigation.

The WTM invokes the Hon'ble Supreme Court's judgment in Reliance Industries Ltd. vs. SEBI (2026 INSC 585) to establish that the blatant misconduct and inducement to investors prima facie satisfies the threshold for "fraud" under PFUTP Regulations.

Actions, Compliance, and Future Obligations

Interim Directions Issued:

1. Noticees are directed to cooperate fully with the Investigating Authority and provide all documents and explanations sought, including those listed in Annexure-B, within 30 days.

2. Mr. Rajesh Mehta (Noticee No. 2) is restrained from buying, selling, or dealing in securities of REL, directly or indirectly, until further orders.

3. REL (Noticee No. 1) is directed to make true and fair disclosures of financial statements, related party transactions, and other disclosures as per LODR Regulations.

Future Actions Ordered:

  • SEBI is directed to conduct a detailed investigation expeditiously.
  • A new forensic auditor is to be appointed to audit the books of accounts of REL, and Noticees are directed to cooperate fully.
  • A copy of the order is to be forwarded to the National Financial Reporting Authority (NFRA) for appropriate action against the Statutory Auditors of REL.

Final Ruling and Enforcement

Status: This is an Interim Ex-Parte Order passed under Sections 11(1), 11(4), and 11B of the SEBI Act, 1992. It is based on prima facie findings and is effective immediately.

Next Steps: The Noticees may file their reply/objections to this order within 21 days of receipt and can indicate if they desire a personal hearing.

The order is without prejudice to SEBI's right to take any other action, including levying penalties and issuing further directions. It is also without prejudice to action against other persons/entities not named as Noticees here.

The order is to be served upon the Noticees, Stock Exchanges (BSE, NSE), Depositories, RTAs, and Banks for necessary action and compliance.