SEBI confirms restraint on Rajesh Exports promoter Rajesh Mehta

The Enforcement Action

The Securities and Exchange Board of India (SEBI) has confirmed its interim restrictions on Rajesh Exports Limited (REL) and its promoter, Mr Rajesh Mehta. In a confirmatory order dated 14 October 2026 (reference WTM/KV/CFID/CFID-SEC6/32770/2026-27), Whole Time Member Kamlesh C. Varshney, acting under Sections 11(1), 11(4) and 11B of the SEBI Act 1992, confirmed and continued the directions first issued in an ex-parte interim order dated 3 June 2026.

REL (PAN AAACR8642N) is a gold refiner and jewellery retailer listed on the NSE and BSE, known for the 'Shubh Jewellers' brand and for owning Switzerland's Valcambi SA through a chain of overseas subsidiaries. Under the confirmed order, Mr Mehta (PAN ADKPM0172C) "shall continue to be restrained from buying, selling or otherwise dealing" in the securities of REL until further orders. REL has been directed to continue making true, fair and complete disclosures of its financial statements and related-party transactions under the LODR Regulations, and both noticees must cooperate with SEBI's investigating authority and a newly appointed forensic auditor.

SEBI stresses that the order is prima facie and protective, not a final adjudication. The regulator records that the directions are intended "to protect the interest of the investors" while its investigation continues. Through the proceedings the noticees denied wrongdoing, submitting that no intent or investor harm was present and that neither REL nor Mr Mehta traded in REL shares or derived any benefit. SEBI did not accept those submissions at this stage.

How the Scheme Worked

Per the order, SEBI began investigating REL for the period 1 April 2020 to 31 March 2024 after a complaint alleged potential financial misrepresentation involving large trade receivables that had remained outstanding for more than two years. It appointed BDO India Services Pvt Ltd as forensic auditor on 3 December 2024.

The interim order, summarised in the confirmatory order, records a cluster of prima facie findings. SEBI alleges REL did not upload the financial statements of its overseas subsidiaries and step-down subsidiaries, depriving investors of information about entities that accounted for the bulk of its consolidated numbers. It found the company had "misrepresented consolidated revenues aggregating to approximately INR 15,15,385 crore", or 99.80% of total consolidated revenue, for FY 2020-21 to FY 2024-25, and standalone revenues of about INR 12,557 crore, or 64.53% of the standalone total, for FY 2020-21 to FY 2023-24.

Among the specific entries SEBI questions, derivative transactions that it says Mr Mehta executed in his personal capacity were "falsely recorded" as REL's own sales of INR 11,487 crore and purchases of INR 11,488 crore with an entity called Affluence Shares and Stocks Private Limited; exchange fluctuations of INR 867 crore and INR 716 crore were booked as revenue and purchases; and INR 204 crore of mutual-fund and fixed-deposit interest was shown as revenue from operations. SEBI also alleges REL "artificially reduced" long-outstanding receivables of INR 2,914 crore through what it called opaque netting arrangements, and disclosed a INR 1,035.27 crore "investment in gold mines in Africa" that it found "unsubstantiated and unverifiable".

A further strand concerns related-party dealings. Based on bank statements, SEBI says REL routed company funds through the personal bank accounts of Mr Rajesh Mehta and his son, Mr Siddharth Mehta, and transferred substantial sums to Elest Pvt Ltd, an entity it describes as controlled by Mr Mehta, without disclosing these as related-party transactions or placing them before the board. The order records REL's explanation that funds were routed through Mr Mehta's account to meet a Karnataka High Court deposit while maintaining what Mr Mehta described as "plausible deniability", an explanation SEBI said "raises serious questions" on corporate governance.

Procedurally, the matter has moved from complaint to investigation, to the ex-parte interim order of 3 June 2026, to written replies and a personal hearing, and now to this confirmatory order, with the detailed investigation and a fresh forensic audit still in progress.

The Law Invoked

The confirmatory order is passed under Sections 11(1), 11(4) and 11B of the SEBI Act 1992, which empower SEBI to issue directions to protect investors and the integrity of the securities market. The underlying interim order recorded prima facie violations of Sections 11(2)(ia), 11C(3) and 12A(a), 12A(b) and 12A(c) of the SEBI Act, the last three being the Act's core anti-fraud provisions.

SEBI also cited Regulations 3(b), 3(c), 3(d), 4(1), 4(2)(e), 4(2)(f), 4(2)(k) and 4(2)(r) of the PFUTP Regulations 2003, which prohibit fraudulent and unfair trade practices, including the use of misleading financial information. Several provisions of the LODR Regulations 2015 were invoked, covering accurate disclosure, financial results and related-party transactions, alongside Section 136(1) of the Companies Act 2013. On the fund-routing point, SEBI relied on Section 188 of the Companies Act and Regulation 2(1)(zc) of LODR to argue that moving money into a promoter's personal account is itself a "transfer of resources" that triggers related-party disclosure, irrespective of the ultimate use of the money.

What Happens Next

This is a confirmatory order continuing interim, protective directions, not a final determination of the allegations. SEBI states that the investigation "is still ongoing" and that its findings are "without prejudice" to further proceedings; the newly appointed forensic auditor has been directed to complete its work expeditiously.

A party aggrieved by a SEBI order may appeal to the Securities Appellate Tribunal (SAT) under Section 15T of the SEBI Act within the prescribed period, and thereafter to the Supreme Court on a question of law. Any final action, such as monetary penalties, disgorgement or a longer market ban, would follow a separate show-cause and adjudication process in which the noticees are entitled to be heard. For now, the restraint on Mr Mehta dealing in REL shares, and REL's disclosure obligations, remain in force until further orders. These remain allegations under examination; nothing in the order amounts to a final finding of guilt.

What It Means

For ordinary shareholders, the order is a reminder that a large headline revenue and a globally recognised subsidiary do not by themselves guarantee the reliability of reported numbers. Much of what SEBI has questioned sits in the gap between standalone and consolidated accounts and in related-party disclosures, which are precisely the notes that reward a careful read. Investors can check whether a listed company faces SEBI action by searching the "Orders" and "Enforcement" sections of sebi.gov.in by company name, and can study a company's related-party transaction disclosures and auditor observations in its annual report and quarterly results filed with the exchanges.

The practical effect of the current order is narrow but pointed. The promoter cannot deal in the company's shares, and the company is on notice to correct its disclosures while the forensic audit proceeds. The order does not freeze REL's operations or restrict public shareholders from trading the stock. The sensible response for an investor is to follow the company's own exchange filings and SEBI's subsequent orders in the matter rather than secondary commentary, and to treat an open regulatory investigation as a live risk factor rather than a settled verdict.

FAQ

Does this mean Rajesh Exports or Rajesh Mehta are guilty?

No. The order is a confirmatory order that continues prima facie, protective directions while SEBI's investigation continues. The findings have not been finally adjudicated, the noticees have denied wrongdoing, and they may appeal to the Securities Appellate Tribunal. Until due process concludes, the allegations remain allegations and not findings of guilt.

What exactly did SEBI order?

SEBI confirmed that Mr Rajesh Mehta remains restrained from buying, selling or dealing in Rajesh Exports shares until further orders, and that the company must make true and fair disclosures of its financial statements and related-party transactions. Both must cooperate with SEBI's investigating authority and the newly appointed forensic auditor as the inquiry continues.

Can the order be appealed?

Yes. A SEBI order of this kind can be challenged before the Securities Appellate Tribunal under Section 15T of the SEBI Act, and a SAT ruling can be taken to the Supreme Court on a question of law. The interim and confirmatory directions stay in force unless a tribunal, or SEBI itself, modifies or vacates them.

Can I still buy or sell Rajesh Exports shares?

Yes. The restraint applies to the promoter, Mr Rajesh Mehta, and not to public shareholders, and the stock continues to trade. The order does, however, flag that SEBI has questioned the company's past financial disclosures, which is a material consideration for any investor weighing the stock.

How can I check if a listed company faces SEBI action?

Visit sebi.gov.in and search the "Enforcement" and "Orders" sections by company name; orders are published as dated documents. You can also read a company's related-party transaction disclosures, auditor qualifications and the difference between its consolidated and standalone results in its annual report and quarterly filings on the BSE and NSE websites.

Where can I read the official order?

The full confirmatory order dated 14 October 2026 is published on SEBI's website in the Enforcement and Orders section.

This report is based on the official SEBI confirmatory order dated 14 October 2026 in the matter of Rajesh Exports Limited, passed by Whole Time Member Kamlesh C. Varshney under Sections 11(1), 11(4) and 11B of the SEBI Act 1992.