Rajesh Exports Shares Rally 5% Following Massive Revenue Fraud Allegations

Rajesh Exports shares experienced a sudden 5% surge to hit the upper circuit on Monday, providing a brief reprieve after a devastating 30% crash in just seven consecutive trading sessions. This volatility follows a bombshell interim order from the Securities and Exchange Board of India (SEBI) regarding an alleged ₹15.15 lakh crore revenue inflation scandal.

The SEBI Investigation and Alleged Revenue Inflation

The turmoil began after SEBI released an interim order based on a forensic review and investigation triggered by a shareholder complaint in March 2024. The regulator claimed to have found "prima facie" evidence suggesting that an staggering 97% to 99% of the company's reported revenue may have been inflated. SEBI described these findings as "egregious and unheard of."

As part of these regulatory measures, SEBI has restrained the promoter, Rajesh Mehta, from buying, selling, or dealing in any securities of Rajesh Exports until further orders. The regulator has also directed the company to provide full cooperation to the ongoing investigation. The impact on investor sentiment has been severe, with the stock tumbling 55% in 2026 so far and losing 87% of its value over a three-year period, bringing its market capitalization down to ₹2,369 crore.

Rajesh Exports Denies Fraud, Cites 'Communication Gap'

In response to the allegations, Rajesh Exports has issued exchange filings maintaining that its declared revenues are accurate and that no overstating of earnings has occurred. The company has attributed the discrepancy to what it calls a "communication gap and confusion" between SEBI and the firm.

According to the company, the core of the misunderstanding lies in how SEBI calculated the revenue discrepancy. Rajesh Exports claims that SEBI mistakenly used the EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of Valcambi instead of the actual Revenue figures to arrive at the 97% difference. The company remains confident that once authenticated documents are submitted, SEBI will arrive at the correct conclusion.

Founder Rajesh Mehta Responds to Regulatory Action

In a recent interview, founder and chairman Rajesh Mehta denied accusations that the company had obstructed the audit process. He asserted that the company has been forthcoming and has submitted all documents requested by investigators.

“I would never agree to the fact that certain relevant documents have not been submitted by us,” Mehta stated, adding that any discrepancies would be reconciled during the process. Notably, Mehta indicated that the company does not currently plan to legally contest SEBI's directions, noting that the interim order does not include fines, penalties, or coercive actions at this stage.

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