SEBI Orders Probe into Rajesh Exports for ₹15 Lakh Crore Financial Misrepresentation

The Securities and Exchange Board of India (SEBI) has ordered a formal investigation into Rajesh Exports Limited (REL) and its Executive Chairman, Rajesh Mehta, over alleged massive financial misrepresentation. Concurrently, SEBI has restrained Mehta from trading in the company’s securities. Scale and Scope of Allegations: The alleged misrepresentation aggregates a staggering ₹15 lakh crore, representing 99.8% of the company’s total consolidated revenue from FY21 to FY25. The probe, triggered by a March 2024 shareholder complaint regarding outstanding receivables, uncovered a "coordinated pattern of financial misrepresentation" designed to project an inflated operational scale and financial health. Key Violations Identified: Fictitious Trading: The company falsely recorded Mehta’s personal derivatives transactions (₹11,487 crore in sales and ₹11,488 crore in purchases) as its own. Revenue Inflation: Exchange fluctuation amounts were incorrectly booked as operational revenue (₹867 crore) and purchases (₹716 crore). Receivables Manipulation: Long-outstanding trade receivables (₹29.14 crore) were artificially reduced via opaque netting arrangements without public disclosure. Fake Consolidations & Assets: The company made false claims regarding an African gold mine investment. Furthermore, it consolidated overseas entities (like Rajesh Singapore and ACC Energy) that actually had negligible or zero operational revenue. Regulatory Non-Compliance: SEBI accused REL and Mehta of actively hampering the investigation. The company provided inconsistent submissions, maintained deficient ledgers with hidden narrations, and refused access to foreign subsidiary books, improperly citing the Swiss Federal Act on Data Protection. $RAJESHEXPO