Bengaluru-based Rajesh Exports Ltd (REL) and its crucial Singapore subsidiary gave contradictory statements to regulators in the two countries, a Mint review of documents showed, blurring the actual finances of overseas units that account for nearly all of its consolidated revenues. These statements are at the core of the charges of financial misreporting and revenue inflation that the Securities and Exchange Board of India (Sebi) has levelled against the company in its 3 June interim order.
According to the 3 June interim order, Rajesh Exports claimed it could not disclose the standalone financial statements of all its overseas subsidiaries, since the Singapore subsidiary—REL Singapore Pte Ltd—had consolidated and shared them. “REL further stated that the audited financial statements of the step-down subsidiaries were first consolidated at the level of REL Singapore and thereafter forwarded to REL for preparation of the final consolidated financial statements,” Sebi said.
However, the same Singapore subsidiary had got an exemption from local regulators from filing consolidated financials, stating that the aggregation will be done by Rajesh Exports in India. It filed its standalone financial statements only in Singapore, withholding the financials of other step-down subsidiaries of Rajesh Exports.
Singapore exemption
“The company is exempted from the preparation of consolidated financial statements as the consolidated financial statements are prepared by the company’s ultimate holding company, Limited, where the consolidated financial statements are available for public use,” the Singapore unit said in regulatory filings in fiscal year 2024 (FY24) and FY25, according to a Mint review of the financials. REL Singapore Pte, which does not have revenue from operations, has yet to file its financials for the year ended 31 March 2026.
“The corporate structure of REL makes it clear that the step-down units were insulated from oversight,” said said Ankita Singh, managing partner at Sarvaank Associates, a boutique law firm. “When a listed entity relies on cross-border corporate exemptions to play hide-and-seek with primary financial trails, it transitions from a failure of disclosure to a deliberate distortion of market information,” Singh said.
However, another lawyer cautioned against concluding that the company had lied, based solely on the inconsistency.
“What emerges from the public record is a prima facie inconsistency. That inconsistency deserves explanation, but it would be premature to conclude, solely on that basis, that a false statement was made in either jurisdiction,” said Sumit Agrawal, senior partner of Regstreet Law Advisors and a former Sebi official.
The money trail
The financial statements of these step-down subsidiaries are vital because they account for the bulk of Rajesh Exports’ reported multi-trillion-rupee consolidated revenues.
Sample this: in FY25, Rajesh Exports reported a consolidated revenue of ₹4.23 trillion. Only ₹7,027 crore, or less than 2% of this, came from the company’s standalone operations in India.
This means nearly 98% of Rajesh Exports’ consolidated revenue in FY25 came from step-down subsidiaries based in Switzerland and Dubai, whose standalone financial statements have not been disclosed in either Singapore or India.
‘No confusion’
“There is no disconnect or confusion,” said Rajesh Mehta, the billionaire chairperson of Rajesh Exports. “I’ve told the Singapore authorities that my parent, Rajesh Exports, does all consolidation of the financials of the step-down subsidiaries, and so I will only be filing the standalone financials”, Mehta said over the phone.
“Now, if my Singapore business also prepares the consolidated financials and shares it with the parent, Rajesh Exports, which will take it into consideration when preparing the consolidated numbers, what is the problem or confusion?”
So if REL Singapore Pte Ltd has the consolidated financial statements of its subsidiaries, why not file them with it, and why seek an exemption to file only standalone financials? Why should I waste (Singapore) $30 and burden myself with more compliance?” Mehta questioned.
Here is how Rajesh Exports, the and jewellery group, is structured. At the top sits Rajesh Exports Ltd, the listed company. Its wholly owned subsidiary in Singapore controls 100% in UAE-based Bab AL Rayan Jewellery LLC, which buys scrap gold and refines it into a final product for sale.
The Singapore entity also controls 95% stake in Switzerland-based Global Gold Refineries AG. Rajesh Exports directly controls the remaining 5%. This company does not have any operations of its, own but is a holding company for Valcambi SA, also based in Switzerland, and engaged in refining and selling gold bullion, as per Sebi’s interim order.
Indian rules require listed companies to publish the audited financial statements of each subsidiary on their websites at least 21 days prior to their annual general meeting, the market regulator noted.
“The conduct of prima facie reveals a coordinated pattern of financial misrepresentation, concealment and regulatory non-compliance extending across multiple financial years,” the regulator noted.
Share spike
Sebi concludes that overinflated revenue at Rajesh Exports led investors to buy its shares, making it appear the company was doing well financially. Shares of Rajesh Exports hit a record ₹1,028.4 on 6 February 2023, giving it a market cap of ₹30,364.5 crore. Since then, the shares have plummeted by over 90%, ending at ₹99.4 a share on Friday.
“Considering the public shareholding in REL, the aforesaid erosion in market capitalization resulted in substantial erosion of public investor wealth estimated at approximately ₹12,725.53 crore,” said Sebi.
Rajesh Exports has denied any wrongdoing, attributing Sebi’s findings to miscommunication between the regulator and the company.
“The major point mis-interpreted with regard to the revenues of the company is totally misplaced. The huge revenues reported in the consolidated financials of the company are primarily from Valcambi, which is engaged in refining and sale of gold bullion to major banks, central banks and other large bullion entities across the world,” Rajesh Exports said in its 10-point submission to the stock exchanges on 5 June.
The company said that it was in the process of addressing every concern raised by Sebi with “explanation, documents and solid evidence.” It highlighted that the Sebi order was interim and no adverse conclusions have been made by the regulator so far.