On 3 June 2026, the Securities and Exchange Board of India (SEBI) dropped a 109-page bombshell on the markets. In an interim order against Bengaluru-based Rajesh Exports Limited (REL), it alleged financial misrepresentation worth a breath-taking ₹15.15 lakh crore. Rajesh Mehta, its promoter and chairman, has been barred from the securities market and the stock hit the 5% lower circuit on three consecutive days after the order. (Read: Rajesh Export Promoter Rajesh Mehta Barred from Trading in Company Shares after SEBI Alleges ₹15.15 Lakh Crore Financial Misrepresentation)
Although SEBI has barred Rajesh Mehta barred from buying/selling/dealing in securities and ordered a fresh forensic audit, the man himself appears completely nonchalant. He told the media, "It is an interim order and nothing in it is true. We are in the process of studying it and will prepare a response."
Perhaps, he has reason to be confident and we, the people, would be foolish to hold our breath. Anyone who has followed SEBI's record on large investigations knows that seemingly hard-hitting orders are decimated on appeal after procedural battles, holes in the investigation or contradictory statements and findings in the orders that are ripped apart by sharp lawyers.
The ₹15 Lakh Crore Question
SEBI's findings, based on a shareholder complaint, are, indeed, stunning. REL reported consolidated revenues of roughly ₹2.80 lakh crore in calendar year (CY)2023. Nearly 99% of this is attributed to its Swiss subsidiary Valcambi SA, a globally-recognised gold refinery. But Valcambi's own stand-alone audited revenue for the year was around ₹542 crore. The gap is astounding.
The company claimed that Valcambi only recognised processing income, but gross gold transaction values were being counted at the group level. The problem, says SEBI, is that the company did not support this claim with documentary evidence, despite repeated summons.
It also found routing of company funds through promoter-linked accounts, subsidiaries with little or no substantive operations, adjustments to trade receivables that are not be adequately explained and diversion of funds to promoter entities for derivatives trading and other investments.
While Opposition parties and influencers are questioning the absence of action by investigation agencies, despite SEBI’s huge disclosure, the real question is the 12-year silence by all regulators including SEBI. Since our 2014 article, Moneylife’s editor Debashis Basu has repeatedly noted in media posts how REL was seen as kosher and even inducted into the NSE200 in 2016 replacing giant ONGC Ltd. It remained there until 2019. In 2022, it was signing deals with Telangana for high-tech products without attracting any scrutiny.
Characteristically enough, the smart money was paying attention. The REL stock has been on a decline since its high of₹1,028 in February 2023 and was trading at a tenth the price when SEBI issued its big order. That is when Beat the Street published an X thread raising questions about gaps in the audit and more (Read: Rajesh Exports: Audit Report & Comparative Cash-flow Statements Missing from Filing).
So, the real questions are not about the ‘alarming’ findings of the regulator which were already known to serious investors, but whether the regulator itself will follow up with a final order, especially when the political signals are to the contrary. There is no follow-up action by any Central investigation agency and the company itself is dismissive about SEBI’s findings.
In a separate report, The Daily Pioneer has pointed out that REL has been listed as a defaulter by Canara Bank and owes it over ₹2,458 crore, but the Bank has not filed a complaint with the central bureau of investigation (CBI).
Also, the insurance behemoth, Life Insurance Corporation of India (LIC), has ignored all the red flags and reports about REL and holds a 10.8% stake in REL, despite the decline in its share price. This cannot happen out of lethargy or ignorance.
These questions are not speculative. They are based on SEBI’s recent history with high-profile cases. Let’s look at a few.
Jane Street: In July 2025, SEBI issued an equally big ‘interim’ order, accusing Jane Street group, one of Wall Street's most secretive and profitable trading firms, of systematic manipulation of India's Bank Nifty and Nifty 50 indices on options expiry days. It alleged illegal profits of ₹4,843 crore of Jane Street’s net profit from India operations of around ₹36,500 crore. The order attracted coverage and attention from regulators around the world. Jane Street appealed the order but paid up in protest. A year later, there is no final order. Will the case end in a settlement, after dragging on for years? (Read: Tough Regulator, Weak Market: Jane Street Saga Exposes a Deeper Problem)
Reliance Industries: Consider what happened to SEBI’s 18-year old case of fraud and market manipulation against Reliance Industries dating back to 2007. The Supreme Court (SC), in a significant judgement, quashed SEBI’s ₹447.27 crore disgorgement order and directed SEBI to refund ₹250 crore that Reliance had already deposited. It only upheld a ₹25 crore penalty for regulatory violations. SEBI had accused Reliance of benefiting from arbitrage between cash and futures markets, operating through 12 affiliated entities. The Court ruled that, although Reliance and its affiliated entities may have breached concentration or position limits, SEBI could not automatically rule that it was a fraud, without intent to deceive or actual manipulation. The apex court order is bound to impact many cases where SEBI has alleged fraud based on technical violations.
NSE Settlement: The National Stock Exchange (NSE) co-location scandal, first reported by Moneylife in 2015, is another case study on how SEBI’s long investigation, which led to a complete overhaul of management, ended in incomplete or botched investigations and orders that were undermined by the gratuitous remarks of SEBI's own whole-time members (WTMs).
The case, which pertained to preferential access to NSE’s co-location terminals for select brokers, expanded into capricious decisions of a long-entrenched management team. In June 2025, NSE, under its present management, offered a fat settlement to close all issues and clear its initial public offering (IPO). SEBI has agreed in principle and the settlement may figure may be approximately ₹1,880 crore, perhaps closing a series of show-cause notices, orders and proceedings against NSE and its managers, some of which remain incomplete, while others were challenged, diluted, dropped or settled.
These are just some of the big cases where SEBI has actually initiated action. There are also others where SEBI has done nothing, despite detailed reports by the serious frauds investigation office (SFIO) documenting serious, market related manipulation and misinformation.
Escape Hatch
The more worrying issue that ought to concern ordinary citizens is the complete erosion of any deterrence due to closure of all wrongdoing offered through the settlement without admission of guilt. In addition to settlements under the SEBI Act, the Supreme Court has permitted this even under the bankruptcy law – in fact, wiping the slate clean of all civil and criminal charges, in one specific case pertaining to a Gujarat-based group. Large defaulters, such as Anil Ambani, have also sought similar settlements.
One can expect a long-drawn battle whose contours are already evident in the statements of Rajesh Mehta. He claims that SEBI has misunderstood its account – apparently so have investors who have dumped his shares for the past three years. If the Reliance judgement is a precedent, REL’s lawyers may claim that the ₹15 lakh crore revenue figure was not fabricated, but the output of aggressive accounting treatment across opaque overseas structures.
Meanwhile, LIC, which holds a significant stake in REL, has not even been questioned. One media report says that the ministry of heavy industries may remove REL from the list of beneficiaries under the production-linked incentive (PLI) scheme for battery manufacturers, after the SEBI order.
An impressive interim order has little meaning until SEBI is able to produce final orders that hold up in court and enforcement action leads to serious deterrence rather than settlements, or high court orders that do not lead to embarrassing strictures and refund of disgorgements.
Until that happens, investors are on their own. They need to study balance sheets, track social media and make their own decisions without waiting for the regulator to tell them what is wrong. The market usually knows before anyone else. In REL’s case, it has known for over 10 years. That does not necessarily mean that it will lead to enforcement action.
After the handling of the A1 case, there is not much credibility of the regulator left and by induction the Indian market also has lost a lot of credibility.
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