Rajesh Exports Under Fire: India's Largest Gold Jewelry Firm Faces ₹15.15 Lakh Crore SEBI Scam Allegations
Executive Summary
Rajesh Exports Limited, once celebrated as India's largest gold jewelry manufacturer and exporter, is now at the center of one of the biggest corporate governance scandals in Indian history. On June 3, 2026, market regulator SEBI issued an explosive 109-page interim order alleging that the company misrepresented approximately ₹15.15 lakh crore in revenue between fiscal years 2021-2025—representing nearly 97-99.8% of its reported consolidated revenues.
Company Background
Origins and Growth
Rajesh Exports Limited was founded in 1989 by Rajesh Mehta and his brother Prashant Mehta, both from a middle-class Jain family in Bangalore. The brothers started operations in a modest ten-person workshop located in their garage, initially trading in silver jewelry .
Business Scale
- Headquarters : Bengaluru, Karnataka, India
- Industry : Gold jewelry manufacturing, refining, and retail
- Claim to Fame : World's largest gold company and only fully integrated entity across the entire gold value chain—from mining to retail
- Export Reach : Gold jewelry exported to over 20 countries worldwide
- Market Share : Contributes approximately 40% of India's gold jewelry exports
- Business Segments : Gold refining, jewelry manufacturing, and retail operations
Financial Scale (Pre-Scam Allegations)
- Reported Revenue : ₹7,41,042 Crores (consolidated)
- Market Cap: ₹2,373 Crore (down -56.7% in 1 year as of June 2026)
- Net Profit : ₹168 Crore (despite repeated profit claims, no dividends paid)
The SEBI Scandal: What Happened ?
Key Allegations
In its interim order, SEBI uncovered several serious violations :
- Revenue Misrepresentation : ₹15.15 lakh crore misrepresented across FY21-FY25
- Percentage Inflated : 97-99.8% of consolidated revenue from overseas subsidiaries
- Fund Diversion : Company funds routed through promoter-linked entities
- Governance Lapses : Serious corporate governance failures and inadequate disclosures
- Non-Cooperation : Company allegedly refused to cooperate with investigators
Regulatory Action
SEBI's interim order includes :
- Rajesh Mehta (Chairman & CMD) barred from trading in Rajesh Exports securities indefinitely
- Company restrained from dealing in securities
- Direction to fully cooperate with investigating officer and forensic auditors
- Fresh forensic audit ordered
Market Impact
Following the announcement:
- Rajesh Exports stock hit a 5% lower circuit
- Investor confidence severely shaken, with LIC and other institutional investors affected
Financial Distress: Bank Loan Crisis
Canara Bank's Stressed Asset
Parallel to the SEBI investigation, financial distress has become evident :
- Outstanding Loan : ₹509.37 crore owed to Canara Bank
- Loan Status : Classified as a stressed asset after repayment defaults
- Bank Action : Canara Bank is selling the distressed debt, inviting bids from bad debt aggregators
- Bankruptcy Plea : Bank awaits NCLT decision on its insolvency petition filed in August 2024
Recent Financial Performance
Despite the scandal, the company reported :
- Q2 FY26 (ending June 30, 2025) : Net profit of ₹176.47 million, turning around from a loss of ₹162.93 million in the previous quarter
- 31st AGM : Held on December 30, 2025, where shareholders approved FY25 accounts and reappointed directors
Leadership Profile: Rajesh Mehta
Background
- Full Name: Rajesh Jaswanth Rai Mehta
- Born : June 20, 1964, in Bangalore
- Education : Completed schooling at St. Joseph's School, Bangalore
- Background : Chose family jewelry business over higher education
- Initial Capital : Started jewelry business with borrowed money (reportedly just ₹1,200)
Business Strategy
Mehta's strategy focused on efficiency and control throughout the gold value chain, from sourcing to retail. Under his leadership, Rajesh Exports became:
- The lowest cost gold jewelry producer in the world
- India's largest exporter of gold products
- A company with 30,000+ jewelry designs in its catalogue
Current Status
As of June 3, 2026, Rajesh Mehta has been barred from dealing in securities of Rajesh Exports until further orders.
Impact on Stakeholders
Investors
- Institutional Holders : LIC (Life Insurance Corporation) among those affected
- Retail Investors : Share value dropped significantly with 56.7% market cap decline in one year
- Trading Restrictions : Promoter and company restrained from securities market activities
Industry Impact
- One of the biggest corporate investigations in India's history
- Raised serious questions about accounting practices and related-party transactions in the gold jewelry sector
- Spotlight on overseas subsidiary verification and consolidated revenue reporting
What Happens Next ?
Ongoing Investigations
1. Forensic Audit : Fresh forensic audit ordered by SEBI
2. Investigation Cooperation : Company directed to fully cooperate with investigators
3. NCLT Proceedings : Bankruptcy plea pending decision
Key Questions Remaining
- Can the company verify the ₹15.15 lakh crore revenue from overseas subsidiaries ?
- What is the true financial position of Rajesh Exports ?
- Will criminal charges be filed against promoters ?
- How will this impact India's gold jewelry export industry ?
Conclusion
Rajesh Exports' fall from grace represents a watershed moment in Indian corporate history. The company that once dominated global gold jewelry exports—accounting for 40% of India's gold jewelry exports—is now facing existential threats from regulatory action, financial distress, and shattered investor confidence.
The SEBI order's allegation that nearly 99.8% of consolidated revenues may have been fake strikes at the heart of the company's business model . As forensic auditors begin their work, the entire Indian corporate sector is watching to see how this case unfolds and what lessons it will teach about corporate governance, financial reporting, and regulatory oversight.
For investors, the message is clear: even the largest and most established companies are not immune to fraud. The Rajesh Exports case will likely become a textbook example of corporate governance failure for years to come.
***
*This article is based on publicly available information as of June 5, 2026. Readers are advised to conduct their own due diligence before making any investment decisions.*
***