Rajesh Exports rejects ₹15.15 lakh crore scam reports:Chairman Rajesh Mehta says ‘Investors do not need to panic’

After SEBI’s interim order, the promoter and chairman of Rajesh Exports says that the talks of a ₹15.15 lakh crore scam going on in the media are completely false. This is just confusion created due to misreading of figures. SEBI had started this investigation following a shareholder’s complaint. In this, allegations of irregularities in the company’s financial records were made. SEBI said in its 109-page order that the company has incorrectly shown 99% of its total revenue. Read the full interview of Rajesh Mehta, Chairman of Rajesh Exports… Question 1: SEBI has stated that 99% of Rajesh Exports’ revenue is inflated? What is the truth? Answer: This is SEBI’s interim order… not a final order. These are not even allegations but observations. The claims being made in media reports for the past 2-3 days that there has been a scam of ₹15.15 lakh crore in Rajesh Exports, revenue has been shown incorrectly or false exports have been made… nothing like this has happened. It’s just a matter of understanding. Question 2: What action has SEBI taken against the company, has any fine been imposed? Answer: No, SEBI has not imposed any fine or penalty on the company. SEBI only had doubts about some figures, based on which they have given observations and sought clarification from the company. Question 3: What is SEBI’s suspicion regarding the company’s revenue and sales? Answer: SEBI’s suspicion is that the company has inflated its sales figures during the 5-year period (2021-2025). However, the matter is that SEBI has made a slight error in understanding the data. They may have added the company’s EBITDA figures instead of the total sales figures, which resulted in them seeing a large discrepancy between total sales and books, leading to this suspicion. Question 4: Where did this revenue of ₹15.15 lakh crore actually come from? Answer: This revenue is from Valcambi, a Switzerland-based step-down subsidiary company of Rajesh Exports. Valcambi is the world’s largest and most prestigious gold refinery. This company sells gold to central banks and major bullion dealers worldwide. The company has submitted completely accurate sales figures for the 5-year period from 2020 to 2025 to SEBI. Revenue of Rajesh Exports (in Crore Rupees) Standalone Profit After Tax / Net Profit (D)992330172432Net Profit Received from Subsidiary Companies (C-D)7469871,4023187181 Question 5: What is the revenue model of the gold refinery business? Answer: In the gold business, turnover is very large, but profit margin is extremely low. Let’s understand this with an example. Suppose Valcambi imported ₹100 worth of impure gold from mines. It processed and purified it in its refinery and sold it in the market for ₹101. In this situation, the company’s total sales will be recorded as ₹101, while the gross profit will be only ₹1. After deducting all expenses, the net profit remains only 25 to 50 paise. SEBI considered this ₹1 gross profit as the base and mistook the remaining large sales as missing, whereas it was part of the turnover. Question 6: How does Rajesh Exports’ revenue model work? Answer: The company’s total revenue comes from two main sources, which are combined to provide ‘consolidated’ figures to the stock exchange: Question 7: Did the company not cooperate with forensic auditors and hide data? Answer: This is incorrect because a forensic audit has been ongoing for 2.5 years. We have provided complete cooperation to the company’s auditors and had given access to all necessary financial records as per regulations. The forensic auditors sat in the office for 3 months. The claims of not providing access to the ERP system and books of accounts to the forensic auditors are completely false. Question 8: What do you have to say about the transfer of ₹338 crore to the promoter’s personal account? Answer: This transaction was completely transparent. The complete details and explanation of which business reason this money came for and why it went back have been submitted to SEBI. Question 9: Have the promoters made any personal use of the company’s money? Answer: The promoters have not withdrawn even a single rupee from the company for their personal use. On the contrary, Rajesh Exports has been a company where the promoters have always funded the company from their own pockets whenever needed. There has been no misuse of company funds or personal benefit taken. Question 10: LIC has a 10% stake in the company. Has this caused any loss to common investors? Answer: LIC has been gradually accumulating shares in our company for the past 15 to 20 years. They have been buying small portions from the open market every year. The most important point is that LIC has not purchased a single new share of our company in the last 4-5 years. This investment is very long-standing and old. No common investor has suffered any loss in this. Question 11: Have the company or promoters sold their shares directly to LIC? Answer: Neither the company nor the promoter has sold even a single share to LIC till date. The promoters have the same number of shares today as they had on the first day. In fact, we have purchased additional shares from the market from time to time because we have complete faith in our company. Whatever shares LIC has acquired, they have been purchased directly from the open market through the stock exchange. Question 12: There is panic selling in the shares which has scared common investors. What advice would you give them? Answer: I would tell investors that whatever pressure is visible on the shares is only due to external environment and rumors. The company’s operations are extremely strong and we will perform well in the future too. Investors do not need to panic or worry at all. This is just a temporary wave. Sometimes it feels like someone is deliberately creating such an atmosphere so that they can buy our shares at lower prices. As soon as this atmosphere calms down, the shares will return to their real value. Question 13: Is there any additional benefit from showing inflated sales figures? Answer: No, in fact the opposite happens. If I inflate revenue without reason and my profit remains the same, then my profitability percentage will decrease. For example, if you earn 10 rupees on 100 rupees, then profit shows as 10%. But if you forcibly show sales as 10 thousand rupees and profit remains 10 rupees, then profit will be only 0.1%. Increasing sales is a loss for us only. If SEBI says don’t show revenue, only show gross profit, then we will stop showing revenue from tomorrow. We don’t need false numbers to impress any bank. Question 14: Does Rajesh Exports have any debt from any bank or institution? Answer: Our company is a completely debt-free company. We do not owe even a single rupee to any bank, institution or entity in the world. On the contrary, we have to receive money from many people around the world. When we have not taken any loan from anywhere and are running the entire business on our own strength, there is no need for us to tamper with the numbers. All our financial accounts are absolutely clean. Question 15: What is the further update on the responses sent to BSE and NSE? Answer: We sent responses to BSE and NSE on the 4th, after which necessary clarifications were also given on the 5th and 6th. We have also issued a press release in this regard. We are submitting to them the complete data of audited balance sheets and sales for the last 5 years. Question 16: What is your clarification on the allegations of hiding information about foreign subsidiaries by citing Swiss data protection regulations? Answer: We have submitted all audited balance sheets of the Swiss subsidiaries along with complete schedules. These balance sheets are audited by the reputed global firm KPMG. As far as withholding certain specific data is concerned, that falls under non-disclosure agreements and international secrecy laws. Question 17: What is the information that cannot be shared and why? Answer: According to international regulations, which country’s central bank was sold how much gold is an international secret. This cannot be made public because it reveals business strategy to competitors and can also create problems for the concerned governments. Under secrecy laws, this is extremely confidential data. Apart from this, all necessary and legitimate business-related figures are already present in the audited balance sheet. Question 18: What will be the company’s next step in this matter? Answer: The company is responding to SEBI’s interim order legally and factually. All audited balance sheets and certified documents of Valkambi and its holding company Gezear are being resubmitted to SEBI. The company is confident that after reviewing these documents, SEBI’s doubts will be completely cleared and the matter will be resolved soon. Knowledge Part: Who is Rajesh Mehta: 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 dropping out of college. In the early days, he traded 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. What is ‘Revenue Inflation’: When a company shows more earnings on paper than actual sales to make its financial position appear 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.