Rajesh Exports shares crash 5% after Sebi action:Regulator says company’s wrongdoings are shocking, bans owner from stock market

Sebi has banned Rajesh Mehta, founder of gold refining company Rajesh Exports, from trading in the share market. The market regulator found in its preliminary investigation that the company inflated approximately 97%-99% of its revenue. Following this news, the company’s shares fell by 5%. Understanding the entire matter through QA. Question 1: What action has Sebi taken against Rajesh Exports and its promoter Rajesh Mehta? Answer: The Securities and Exchange Board of India (Sebi) has imposed an interim ban on trading by Rajesh Mehta, promoter and chairman of Rajesh Exports. This step has been taken after Sebi found serious irregularities in the company’s financial operations. Question 2: What irregularities did Sebi find in its investigation, which the regulator has called shocking? Answer: Sebi has issued a 109-page interim order. It states that according to preliminary investigation, Rajesh Exports has greatly exaggerated its total reported sales. Approximately 97%-99% of the company’s revenue may exist only on paper. The order states that inflating revenue to such a large extent is shocking. Question 3: What official clarification has Rajesh Exports given on Sebi’s allegations? Answer: The company stated in a stock exchange filing that it received Sebi’s interim order on June 3, 2026. According to the company, this is only an interim order and Sebi has not yet reached any final or adverse conclusion on any aspect. Regarding the allegation of inflating revenue, the company stated that the company’s declared revenue is completely accurate and there is no exaggeration in it. It appears that some kind of ‘communication gap’ and confusion has arisen between SEBI and the company. Question 4: What was the state of the company’s shares in the market today after Sebi’s order? Answer: After allegations of financial irregularities, there was selling in Rajesh Exports’ shares throughout Thursday’s trading session. The company’s share remained locked at the lower circuit of 5%. This means that only sellers were present in the market and there were no buyers. Question 5: Who is Rajesh Mehta and how did he start this company? Answer: 60-year-old Rajesh J. Mehta is a resident of Bengaluru and is the founder and chairman of Rajesh Exports. He entered the precious metals business at a very young age after leaving college. In the early days, he used to trade in silver. After that, he entered the jewelry business. He established Rajesh Exports in 1989 and made it one of the world’s largest gold refining and export companies. Question 6: What is Rajesh Exports’ business model and how big is the company? Answer: Rajesh Exports’ business starts with purchasing raw gold. The company refines it to make pure gold, then manufactures jewellery from it and sells it. The company’s annual revenue is approximately $39.2 billion (around ₹3.75 lakh crore). Question 7: What has been the biggest turning point or milestone in the company’s history? Answer: The biggest change in the company’s business came in the year 2015. That’s when Rajesh Exports acquired the famous Swiss gold refinery ‘Valcambi’. Valcambi is considered one of the world’s largest gold refining facilities. After this deal, Rajesh Mehta’s company emerged as a major force at the global level. Question 8: What is the total estimated figure of revenue irregularities? Answer: According to investors and experts, if SEBI’s claims are taken as the basis, this figure of revenue irregularities could reach approximately ₹15.15 lakh crore. This is why it is being considered one of the biggest suspected revenue cases in the corporate world. Question 9: What impact has this action had on the government insurance company LIC? Answer: SEBI’s action on Rajesh Exports has had a direct impact on Life Insurance Corporation of India (LIC). LIC holds a total stake of 10.8% in Rajesh Exports. After SEBI’s order, LIC’s shares also recorded a decline of approximately 1%. Question 10: What losses could common investors and LIC face from this case? Answer: Market analysts say that allegations of revenue fraud on such a large scale could lead to a massive fall in Rajesh Exports’ shares. The decline in share prices will reduce the value of LIC’s investment in the company. Additionally, the risk of capital loss has increased for retail investors who have purchased shares of this company. Question 11: What will be the next process after this interim order? Answer: This order by SEBI is currently interim, which means the investigation is not yet complete. SEBI will continue its detailed investigation. During this time, Rajesh Mehta and the company will be given an opportunity to present their side. If the allegations are proven true in the final investigation as well, SEBI can impose heavy penalties on the company, ban the promoters from the market for a longer period, and the case may also be referred to criminal investigation agencies. Knowledge Part: Know what is ‘Revenue Inflation’? When a company shows more earnings on paper than actual sales to make its financial position look stronger to obtain bank loans or to increase its share prices in the stock market, it is called ‘Revenue Inflation’ or inflating revenue. This often involves creating bills without any actual delivery of goods. ​