In a post on X, Congress general secretary in-charge (Communications) highlighted LIC’s 10.8% holding in the company—funded by public money—and questioned how such a large-scale issue went undetected by India’s largest insurer despite significant bank exposures.

He also raised questions over the role of the ruling Bharatiya Janata Party (BJP) in relation to LIC’s investment in the company.

“How could LIC fail to detect such a massive fraud in a company where it held such a substantial stake?” Ramesh wrote.

“This raises the question of whether the purchase of such a large stake by LIC was directed by the ruling ecosystem,” the Congress leader added.

SEBI acts against Rajesh Exports

The Securities and Exchange Board of India (SEBI) on Wednesday barred Rajesh Mehta from buying, selling or otherwise dealing in the securities of Rajesh Exports until further orders.

In its interim order, the regulator also directed the company to extend full cooperation to investigating officers and forensic auditors examining its financial records.

Allegations Against the Company

SEBI's probe has flagged several alleged irregularities in the company's financial reporting and disclosures, including:

  • Manipulation of books of accounts over multiple financial years beginning FY2021.
  • Inflation of revenues through transactions involving overseas subsidiaries.
  • Alleged misrepresentation of 99.8 percent of reported revenues, amounting to approximately Rs. 15.2 lakh crore, attributed to subsidiaries between FY21 and FY25.
  • Failure to disclose an investment of Rs. 1,035 crore in gold mining assets in Africa in the standalone financial statements of Rajesh Exports and its subsidiaries for FY2023.

Company Rejects Revenue Inflation Allegations

Responding to the regulator's findings, Rajesh Exports said there was no overstatement of revenues in its financial statements.

"There seems to be some type of communication gap and confusion between SEBI and the company," the company said, as quoted by NDTV Profit.

"The revenues declared by the company are correct and there is no over-stating of revenues," it added.

About Rajesh Exports

Rajesh Exports, one of India's largest gold exporters and jewellery manufacturers, has long been a prominent player in the bullion and precious metals industry.

The company gained global attention after acquiring Swiss gold refinery Valcambi in 2015.

However, the latest regulatory action has raised serious concerns over its corporate governance practices and financial transparency, triggering a sharp sell-off in the stock.