Rajesh Exports SEBI Case: Rajesh Mehta Denies Revenue Inflation Charges, Plans Fresh 400GB Document Submission

Rajesh Exports, one of India's largest gold refiners and jewellery exporters on Sunday pushed back against the Securities and Exchange Board of India (SEBI) recent interim order, saying the regulator's findings stem from a misunderstanding of accounting data and that the company will resubmit all relevant documents within the next 15 days to help resolve the issue.

Rajesh Exports SEBI Case Latest Updates: 109-Page SEBI Order Raises Questions Over Financial Reporting Practices

The Bengaluru-based gold refiner and jewellery exporter said it had already provided an extensive volume of records to the market regulator during the course of the investigation.

Rajesh Exports to Resubmit Documents as SEBI Flags Alleged Rs 15.15 Lakh Crore Revenue Inflation

According to company chairman and founder Rajesh Mehta, several hundred gigabytes of documents running into lakhs of pages had been submitted earlier, but he believes the relevant files may not have been properly identified during SEBI's review. The company has now decided to furnish the requested information again in an effort to address the concerns raised by the regulator.

The clarification comes days after SEBI issued a 109-page interim order alleging that Rajesh Exports overstated revenue by nearly Rs 15.15 lakh crore between FY21 and FY25. The regulator also raised concerns over related-party transactions, suspected fund diversion and alleged disclosure lapses involving certain subsidiaries linked to the company's battery manufacturing business.

Responding to the allegations, Mehta argued that the regulator had incorrectly interpreted the company's financial statements by treating EBITDA figures as revenue. He maintained that EBITDA represents operating earnings or gross profit and cannot be equated with total sales turnover. According to him, this accounting misunderstanding led to the large revenue inflation figure cited in the order.

To explain the company's position, Mehta said that in the gold business, a large transaction value generates only a relatively small margin. He argued that SEBI's interpretation effectively treated profit margins as revenue figures, resulting in what he described as an inaccurate assessment of the company's financial reporting.

The chairman also questioned the rationale behind inflating revenue, stating that companies generally seek to improve profitability metrics rather than sales figures alone. He reiterated that Rajesh Exports has complied with statutory disclosure requirements and remains committed to cooperating fully with the investigation.

SEBI's interim order further alleged that funds may have been routed through accounts linked to promoters. However, Mehta categorically denied the allegations, asserting that no funds had been improperly transferred and that the company remains debt-free with no pledged promoter holdings. He maintained that neither the company nor its promoters had engaged in any wrongdoing.

Rajesh Mehta Remains Confident Despite Market Ban and Audit Directive

The regulator's order barred Mehta from accessing the securities market and directed a fresh forensic audit of the company's books. Despite the restrictions, the chairman expressed confidence that the matter would eventually be resolved in the company's favour. He also indicated that Rajesh Exports is open to any further examination of its records and operations.

Ministry of Heavy Industries May Drop Rajesh Exports from Battery PLI Scheme

Meanwhile, the controversy has drawn the attention of the Ministry of Heavy Industries, which is reviewing the company's participation in the government's battery energy storage incentive programme. Sources indicated that officials are examining the implications of SEBI's findings, particularly in relation to Rajesh Exports' lithium-ion battery ventures, including Elest Pvt Ltd and ACC Energy Storage Pvt Ltd.

The ministry is understood to be assessing whether the company should continue to remain part of the incentive scheme while regulatory proceedings are underway. A final decision is expected after a detailed review of SEBI's observations and related developments.

While SEBI's investigation continues, Rajesh Exports has maintained that the allegations are based on an accounting misinterpretation and has pledged full cooperation with authorities as it seeks to clear its name.