Here's a puzzle that would make anyone raise an eyebrow. Rajesh Exports Limited reported consolidated revenues of nearly Rs 7.7 lakh crore. That's the kind of scale that puts a company among India's largest enterprises. Yet the Enforcement Directorate (ED) found something bizarre when they raided the company's premises in June 2026: the Chief Financial Officer hadn't drawn any salary since 2020, and the Managing Director was paid only around Rs 17,000 per month.
The ED called this a "significant departure from standard commercial practices". Think about it for a moment. A company claiming to generate Rs 7.7 lakh crore in revenue can't afford to pay its top executives market salaries? Either this is the most charitable leadership team in corporate history, or something is seriously wrong with the revenue numbers themselves.
The compensation anomalies weren't an isolated red flag. They were part of a much larger pattern that caught the Securities and Exchange Board of India's (SEBI) attention.
That's not a typo. Rs 15.15 lakh crore. And it represents nearly 99.8% of the company's total reported consolidated revenue during that five-year period. SEBI's investigation found evidence of non-genuine transactions, improper accounting practices, diversion of company funds through promoter-linked entities, and inadequate disclosures to investors.
The regulator also flagged some creative accounting tricks. Derivative transactions undertaken by CMD Rajesh Mehta in his personal capacity were recorded as company sales and purchases amounting to more than Rs 11,400 crore each. Exchange fluctuation gains and losses worth hundreds of crores were incorrectly classified as revenue and purchases. Even interest income from mutual funds and fixed deposits was booked as revenue from operations.
Here's the thing that should have set alarm bells ringing much earlier. Between 97% and 99% of Rajesh Exports Limited's consolidated revenue came from overseas subsidiaries, not the standalone Indian parent company.
The company's structure looked like this: Rajesh Exports Ltd (India) owned REL Singapore, which owned Global Gold Refineries AG (GGR) in Switzerland, which owned Valcambi SA—the actual operating refinery. The problem? Most of the revenue was booked at the GGR level, a holding company that wasn't independently audited.
See the gap? The consolidated financials showed massive revenues, but the actual operating entity reported a fraction of that amount. The intermediate holding companies created layers that obscured transaction trails and made verification nearly impossible.
While SEBI was examining the accounting, the Enforcement Directorate launched its own investigation under the Foreign Exchange Management Act (FEMA). On June 23, 2026, ED officials searched nine premises in Bengaluru and Mumbai. What they found was troubling.
The agency alleged that Rajesh Exports Limited failed to produce records for imports, exports, overseas investments, and the settlement of foreign trade receivables and payables. The absence of these records, the ED said, made it "almost impossible" to verify the genuineness of transactions under investigation.
Specifically, the ED flagged Rs 3,000 crore worth of opaque netting and set-off arrangements involving foreign trade receivables and payables with suspicious overseas counterparties based in the UAE and other jurisdictions. They also couldn't find any documents supporting the company's claimed Rs 1,035 crore investment in African mines—neither during the searches nor when subsequently requested.
Physical verification revealed another red flag: approximately 40% mismatch between the stock recorded in factory registers and the actual inventory available at the premises. When your gold inventory doesn't match what's in your books, that's a problem.
How did this happen without board or regulatory intervention? The answer lies in systemic governance failures.
SEBI found that substantial sums were routed through the personal bank accounts of Rajesh Mehta and Siddharth Mehta without board approvals, audit committee approvals, or disclosure as related-party transactions. The regulator characterized this as demonstrating "systemic failure of corporate governance, concealment of material information and deliberate circumvention of regulatory requirements".
The company's board committees—Audit, Risk Management, Nomination & Remuneration—existed on paper but failed in practice. They didn't detect or prevent the alleged revenue misrepresentation over multiple years. They didn't question the unusual compensation structure. They didn't verify the authenticity of foreign transactions and investments. AnnualReports
When SEBI appointed a forensic auditor (BDO India Services), the company denied access to enterprise resource planning systems, books of accounts, and journal dumps. Out of transaction samples worth more than Rs 7,000 crore, complete supporting documentation was provided for only a small fraction. That's not an oversight—that's obstruction.
The market reaction has been brutal. Following SEBI's order, Rajesh Exports Limited shares hit the 5% lower circuit. The stock has lost more than 80% of its value over the past three years. The current price hovers around Rs 102, down from a 52-week high of Rs 237.88.
The pain extends to major stakeholders.
Canara Bank has classified its Rs 509 crore exposure as a stressed asset and initiated steps to auction it.
If the allegations are proven, the financial consequences could be severe. Under FEMA, quantifiable contraventions can attract penalties up to three times the sum involved.
Additional consequences could include confiscation of equivalent value of property situated in India, and in severe cases, imprisonment for up to five years for concealing foreign assets exceeding Rs 1 crore or failing to pay penalties. SEBI could impose its own penalties, including disgorgement of gains, market restrictions, and director disqualification.
Beyond the financial hit, the company faces operational disruptions. Banking relationships are strained—Canara Bank's stressed asset classification may trigger similar reviews by other lenders. International trade relationships could suffer as overseas counterparts conduct enhanced due diligence. The complex multi-jurisdictional structure that enabled the alleged irregularities now becomes a liability as each subsidiary faces potential independent regulatory action.
The Rajesh Exports Limited case isn't just about one company. It's a wake-up call about corporate governance standards, auditor oversight, and the mechanisms designed to protect minority shareholders. When 97-99% of revenue comes from overseas subsidiaries that can't provide documentation to support their numbers, that's a structural problem, not a minor accounting issue.
The investigation began with a single shareholder complaint in March 2024 about unpaid trade receivables. Two years later, it has exposed one of the largest alleged accounting irregularities in Indian corporate history. The question isn't just how this happened—but why it took so long to catch.
For investors, the lesson is clear: revenue growth should never be viewed in isolation. The quality of earnings, cash flow generation, receivable trends, and balance sheet strength often provide a more complete picture of corporate health. And when governance standards weaken, shareholder value can be destroyed far more rapidly than it is created.
The SEBI order is interim, not a final verdict. Rajesh Exports Limited and Rajesh Mehta will have the opportunity to present their defense. But regardless of the eventual outcome, this case is already shaping up to be one of the most consequential corporate governance investigations in recent Indian market history. The message is clear: financial performance may attract attention, but governance determines sustainability.
