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India’s markets regulator has alleged that the owner of Swiss gold refiner Valcambi SA overstated revenue, according to an interim order issued Wednesday.
Mumbai-listed Rajesh Exports Ltd. prima facie misrepresented about 15.2 trillion rupees ($159 billion) — equaling 99.80% of its revenues from subsidiaries over the five fiscal years through March 2025 — the Securities and Exchange Board of India said in its order and asked the company to make “true and fair” disclosures in its financial statements and other filings.
Shares of the company, valued at about $321 million, hit their 5% daily lower limit on Thursday and have lost more than 40% this year.
The regulator also barred Rajesh Mehta, the company’s majority shareholder and chairman from trading in the company’s stock until further notice, saying the revenue figures allowed the company to present an “inflated and misleading picture of its scale, financial position and health.”
The case also adds to scrutiny of auditors’ role in flagging accounting lapses at Indian companies. Last year, SEBI barred the founders of Droneacharya Aerial Innovations Ltd. over alleged misuse of IPO proceeds and misrepresentation of financial statements. In the Rajesh Exports order, the regulator also cited “prima facie misconduct and dereliction of duties” by the company’s statutory auditors.
Rajesh Mehta and statutory auditor BSD & Co. didn’t immediately respond to email queries.
The investigation revealed a pattern of “routing corporate funds through personal accounts, misutilization of funds to promoter-controlled entities, and obscuring fund trails” and there is a “credible and real risk” that the firm’s assets may be alienated or dissipated without immediate restraint, SEBI member Kamlesh Chandra Varshney said in the order.
The Bengaluru-headquartered company, which touts itself as the largest exporter of gold products from India, bought Valcambi in 2015 for $400 million.
Life Insurance Corp., the country’s biggest insurer, and funds managed by global investors including Charles Schwab Corp. and Vanguard Group Inc. are among the investors in the firm. Founders own the bulk of the company. About 15% of the firm is owned by foreign investors.
The probe into Rajesh Exports’ accounts began in March 2024 after a shareholder complaint alleged potential misrepresentation of financial information. The regulator appointed an investigating authority later that year and then hired BDO India Services Pvt. as a forensic auditor.