India has quite a complicated relationship with frauds & scandals. In 1992, Harshad Mehta, the “Big Bull”, shook the nation with an INR 4,000 crore scam and even before them, the Telgi stamp paper fraud. More recently, the Adani-Hindenburg storm kept the investors on edge for months.
Now, a new name is making headlines, Rajesh Exports, and this time, the number can be even bigger – perhaps the biggest in history.
Rajesh Exports is India’s largest gold refinery and jewellery exporter. Behind Rajesh Exports Ltd. is the Chairman, promoter, and Managing Director of the company, Rajesh Mehta.
India’s market regulator, SEBI, has accused him of inflating the company’s consolidated revenue from $158bn to ₹15.15 lakh crore ($15.15 trillion) between the 2021 and 2025 financial years. To make it even simpler, the amount is larger than India’s entire defence budget for over a decade. An interesting point is that Life Insurance Corporation of India (LIC) holds nearly 11% of this company, which means public money, your money is also at stake.
Simplifying the Rajesh export case in more detail for you.
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What Are the Allegations and What SEBI is Saying?
Following the shareholder’s complaint in 2024, SEBI began its investigation. The complaint was regarding the large trade receivables. When SEBI dug into the matter, it discovered the gap between the numbers, which is described as “egregious and unheard of.”
The main allegations were:
- Fake Revenue: SEBI says 97–99% of Rajesh Exports’ revenue was fabricated. The company claimed ₹15 lakh crore in revenue over 5 years, a number so big it couldn’t even be verified.
- Overseas Business Was Tiny: Rajesh Exports said all its money came from foreign subsidiaries. But in reality, their Swiss company, Valcambi, only made ₹543 crore in 2023, while the parent company reported ₹2.93 lakh crore. The numbers just don’t add up.
- Suspicious Trades Without Proof: Rajesh Exports made purchases totalling ₹11,400 crore through a broker called Affluence Shares. But the broker said, “We don’t know them”, and the transactions didn’t even show up in GST records. Basically, the paper trail vanished.
- Boss Moved Company Money Into His Own Account: Rajesh Mehta quietly transferred ₹339 crore of the company’s money into his personal trading account via MCX without informing or seeking the board’s approval. That’s a straight-up misuse of company funds.
If you are someone who wants to start their own export business, then read Export Business in India: Guide to Get You Started.
The Fallout Of Shares:
The actions against Rajesh Exports caused a market-wide share fallout, and panic spread on Dalal Street. The crashout of Rajesh Export fell to 5% of the maximum daily limit, the lowest to date.
The scandal has also created a major headache for public institutions. Interestingly, while regular domestic mutual funds completely avoided Rajesh Exports stock for the last decade due to scepticism over its numbers, the state-owned Life Insurance Corporation of India (LIC) did the opposite. LIC aggressively increased its stake in the company from roughly 2% in 2016 to nearly 11%, exposing massive amounts of public savings to the resulting wealth destruction. Furthermore, state-owned Canara Bank has initiated debt recovery proceedings against the firm following loan defaults.
As an immediate disciplinary action, SEBI has barred Rajesh Mehta from buying, selling, or dealing in the securities market until further orders.
What is the Say of Rajesh Mehta on These Accusations?
Rajesh Mehta denies all the accusations and allegations against him of revenue inflation and fraud. According to Mehta, all these claims stem from misunderstandings and “miscommunication” between the company and its shareholders.
Mehta claims that all the figures provided by him to the SEBI are accurate. He argues that SEBI mistakenly looked at Valcambi’s value addition or EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) instead of its total turnover. He said the gold business’s net profit is below 1%, with a very low margin. This is why the company reported trillions in revenue and a very low net profit.
Some Commonly Asked Questions in the Rajesh Export Case:
Who is Rajesh Mehta?
Rajesh Mehta, born on June 20, 1964, Bengaluru, is the Managing Director of Rajesh Exports. He was the shining star in the jewellery business for over three decades. He took over his father’s small jewellery business and made an empire in the export market. Rajesh Export is claimed to be the only jewellery business in the world to refine raw gold into fine jewellery. Valcambi SA, a Switzerland-based firm known as the world’s largest metal refinery, was acquired by Mehta.
Where is Rajesh Mehta Now?
Rajesh Mehta, founder and Executive Chairman of Rajesh Exports, is reportedly at his home in Bengaluru, India. He is denying all accusations made against him by the Securities and Exchange Board of India (SEBI) as part of the ongoing investigation.
How did Rajesh Mehta become successful?
Rajesh Mehta took over his small family jewellery business. He started with a small-scale silver trading and made it one of the world’s largest gold and jewellery empires. He and his brother borrowed Rs. 1200 from their family and started a small-scale silver trading business in Bengaluru. He started his gold manufacturing business in his garage, which helped him to maintain control of the cost and production.
After manufacturing in the early 1990s, he expanded his business into global markets, with success in Dubai, the UK, the US, and Europe.
Is Rajesh Mehta a Jain?
Yes, Rajesh Mehta, the founder of Rajesh Export, was born into a Jain family. With the background of the gold business. He is also recognised within his community and has won a social award from the Jain Community, the Jain Bhushan Award, presented to him by the Jain Social Groups International Federation.
