$158 Billion Revenue? India’s Gold Giant Cannot Account for 99.8% of Earnings, SEBI Says

India’s market regulator alleges that Rajesh Exports, the gold main behind Swiss refiner Valcambi, misrepresented about $158 billion in income over 5 years. SEBI says that determine equals 99.8% of the income the corporate credited to its subsidiaries.

The Securities and Exchange Board of India (SEBI) issued the interim order on June 3. It barred promoter and chairman Rajesh Mehta from the securities market and ordered a recent forensic audit.

Why the Numbers Stopped Adding Up

Rajesh Exports constructed a Fortune Global 500 profile on consolidated income. Between 97% and 99% of that complete got here from abroad subsidiaries, mainly Valcambi. SEBI says auditors couldn’t match these figures towards subsidiary information.

“REL has prima facie misrepresented roughly INR 15,15,385 crore [$158 billion] i.e. representing 99.80% of its revenues that are attributed to subsidiaries in the course of the interval FY 2020-21 to FY 2024-25,” SEBI Whole-Time Member Kamlesh Chandra Varshney wrote within the interim order.

The probe traces again to a shareholder grievance in March 2024 about massive commerce receivables. SEBI says the corporate failed to provide possession information, reconciliation statements, or transaction-level proof regardless of repeated requests.

The regulator alleges the corporate booked the total gross worth of refined gold as its personal income. Much of that metallic belonged to clients and was solely processed for a price.

Valcambi’s audited accounts reportedly confirmed lower than 0.5% of the group’s claimed complete.

The case lands whereas the tokenized gold market expands and traders revisit the gold safe haven narrative. It raises recent questions on how bodily gold flows are valued and disclosed.

“India might have simply witnessed one of its greatest accounting frauds ever,” remarked one analyst.

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Fabricated Trades and Diverted Funds

SEBI flagged roughly ₹11,487 crore, about $1.3 billion, in transactions with dealer Affluence Shares and Stocks. The dealer informed the regulator that Rajesh Exports was by no means a consumer and that no trades occurred.

The order additionally alleges that firm funds moved to Mehta’s private account for derivative trading with out board approval. SEBI rejected the corporate’s refusal to share subsidiary information, which cited Swiss privateness legislation.

These claims place auditors under fresh scrutiny, echoing earlier debates over oversight in some of the biggest financial frauds.

The case additionally displays wider issues round real-world asset tokenization and verifiable backing.

The Company Pushes Back

Rajesh Exports denies any wrongdoing. In its change submitting, it referred to as the order interim with no closing conclusion and stated its income reporting follows accounting requirements. The firm attributes the hole to a comparability of gross gold worth towards processing earnings.

“The revenues declared by the corporate are appropriate and there’s no over stating of revenues. There appears to be some sort of communication hole and confusion between SEBI and the corporate…The firm rejects all adversarial media studies showing with regard to the interim order of SEBI. The firm will likely be shortly issuing a media clarification which might make clear and settle the pointless hypothesis within the media,” Rajesh Exports Limited countered.

Notwithstanding, markets reacted rapidly. The inventory hit its decrease circuit close to ₹104 ($1.09) on June 4. Life Insurance Corporation holds about 10.8% of the corporate, and roughly 194,000 retail shareholders are uncovered.

SEBI’s instructions are interim and ex-parte, so no closing guilt has been established. The firm has 30 days to reply intimately, and a recent forensic audit will comply with.

How regulators reconcile the gross gold worth towards the processing charges might resolve whether or not the misrepresentation label holds.

Primary sources embrace the SEBI interim order and the corporate filing.

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