SEBI Scrutiny Heats Up: Rajesh Exports Defies Revenue Inflation Claims, Citing 'EBITDA Misreading' by Regulator

SEBI Scrutiny Heats Up: Rajesh Exports Defies Revenue Inflation Claims, Citing 'EBITDA Misreading' by Regulator​

Gold jewelry maker and exporter Rajesh Exports Ltd has strongly rebutted SEBI's allegations of revenue inflation regarding its overseas subsidiaries. The company, which is currently under regulator scrutiny after nearly two-and-a-half years of clarifications, maintained that the alleged ₹15.15 lakh crore discrepancy stems from a fundamental misinterpretation of financial metrics by the regulatory body.

Rajesh Mehta, founder and Chairman of Rajesh Exports, stated that while SEBI raised concerns about inflated consolidated revenues, only nine queries remain unresolved. He characterized all other flagged questions as minor, emphasizing that his company has provided extensive documentation addressing the regulator's observations.

Addressing the Core Revenue Discrepancy with Valcambi​

SEBI had previously held an interim order concluding that Rajesh Exports artificially inflated its consolidated revenues by ₹15.15 lakh crore across FY21 through FY25. This allegation was based on attributing outsized revenues to overseas subsidiaries, particularly the Swiss-based entity, Valcambi SA.

Rajesh Mehta fiercely pushed back against this finding, contending that the discrepancy is due to a simple misreading by SEBI. He asserted that "Sebi has taken the EBITDA of Valcambi and considered it as revenue," which he called "the nucleus of the confusion."

The company acknowledged that Valcambi accounts for 97–99 per cent of the consolidated revenues but denied that its standalone revenue was as low as 0.50 per cent. Mehta clarified that this 0.50 per cent figure represents EBITDA, not total revenue.

The Scale and Structure of Valcambi’s Operations​

To bolster his defense, Mehta sought to underscore the significant operational scale of Valcambi SA in the global precious metals market. The Swiss refiner processes approximately 900 tonnes of precious metals annually.

Of this production, 300 tonnes involve toll refining, while the remaining 600 tonnes represent outright purchase and sale to banks and central banks globally. Mehta noted that over five years, this volume totals roughly 3,000 tonnes, directly correlating with the ₹15,10,000 crore figure currently under investigation.

Mehta added that the entity GGR (Global Gold Refinery), which is the holding company of Valcambi and to which Rajesh Exports holds a 5 per cent stake, does not have independent revenue. He clarified that GGR only consolidates its subsidiaries' revenues, meaning it did not report higher than the actual consolidated figure.

Clarity on Subsidiary Disclosures and Promoter Transactions​

In response to SEBI’s observations regarding the non-uploading of standalone financials for material overseas subsidiaries, Mehta conceded the observation. However, he stressed that his team is currently focused on resolving the pending regulatory queries first.

Regarding banking records showing transfers totaling ₹338.90 crore from Rajesh Exports to promoter personal accounts between April 2020 and September 2025, which subsequently included a return of ₹232.4 crore, Mehta insisted that all transactions were legitimate and carried out purely for business purposes. He stated unequivocally that there has been "no diversion of even a single rupee."

When questioned why these transfers were not disclosed as related-party dealings, given the chairman’s declared remuneration of ₹1.2 lakh per annum, Mehta argued the transactions were commercial in nature. He added that the accounts were used strictly for channeling and returning the required product.

Other Flagged Transactions Come Under Scrutiny​

SEBI had also flagged a substantial movement of ₹11,400 crore representing sales and purchase transactions between Rajesh Exports and Affluence Shares and Stocks Limited during FY22–FY24. Mehta affirmed that complete documentation was provided to the regulator regarding this transaction, characterizing the explanation as "fully satisfactory."

Furthermore, concerning the circular fund routing scheme involving ACC Energy Storage and promoter-controlled Elest Pvt Limited, which included a ₹147 crore transfer returned on the same day, Mehta labelled these transactions "completely commercial." He stated that the regulator’s characterisation of these schemes was an "out-of-place comment."

On a separate transaction involving a ₹565 crore transfer to Elest Pvt Ltd., Mehta clarified that approximately ₹300 crore of the amount had since been returned. These funds were extended as loans on a need basis, noting that Elest also provided loans to Rajesh Exports in return. He concluded that "Every justification of every rupee has been given to SEBI."