EXPLAINER: An Indian gold firm allegedly inflated revenue by $159B using its Swiss unit

An official Indian investigation into gold company Rajesh Exports has alleged that the firm overstated revenue of its Swiss refining unit Valcambi to the tune of $159 billion – a figure unheard ​of in the country’s accounting probes.

The scale of the alleged misreporting, released publicly by the markets regulator on Wednesday, ‌has raised questions about how investors and analysts missed this, especially because India’s state-run insurance giant LIC owns 11% of the company.

Rajesh Exports has denied wrongdoing. On Friday, in an exchange statement, the company said, “the major point mis-interpreted with regard to the revenues of the company is totally misplaced.” ​LIC did not responded to Reuters queries.

Valcambi declined to comment, adding that it has no information about the issue, ​which concerns its controlling shareholder.

Here are some of the Securities and Exchange Board of India’s (SEBI) preliminary ⁠findings.

Revenue inflation and Valcambi

Valcambi, one of the world’s largest refiners of precious metals, was owned by European Gold Refineries until ​a 2015 all-cash sale to Rajesh Exports.

SEBI said Rajesh Exports allegedly inflated its reported India revenue by 15.15 trillion rupees ($158.93 billion) ​between April 2020 and March 2025. Almost all of the company’s revenue was attributed to Valcambi, the group’s main operating entity, though its standalone accounts showed revenue of $70 million to $100 million, SEBI said.

Rajesh Exports chairman Rajesh Mehta did not comment on the difference between Valcambi’s revenues and the Indian ​unit’s financials on Thursday, but he told Reuters all disclosures were correct.

“There seems to be some miscommunication with SEBI and ​a gap of information. The financials are perfect,” Mehta said, adding that the company “will continue to cooperate.”

Rajesh Exports is listed in Mumbai and its ‌shares ⁠have fallen 10% in the wake of SEBI’s order.

What does Rajesh Exports do?

Rajesh Mehta and his brother started Rajesh Exports in 1989 in Bengaluru.

It has since expanded to 12 countries and calls itself a “global leader in the gold business,” spanning refining to retailing.

The company gained global prominence after its 2015 acquisition of Valcambi for $400 million.

Missing mines in Africa

SEBI has alleged that Rajesh Exports disclosed ​to Indian exchanges that it ​invested 10.35 billion Indian rupees ⁠in gold mines in Africa.

But an examination of the financial statements of its subsidiaries did not find “supporting documentation demonstrating the existence of the alleged investment in gold mines in Africa,” according to ​SEBI’s order.

When asked, Rajesh Exports told SEBI that investments in gold mines existed through foreign ​subsidiaries and the ⁠investment figures were “tallying and correct,” the order showed.

Fictitious trades

SEBI said Rajesh Exports recorded “fictitious revenue” in its dealings with a local broker. More than 114 billion rupees were booked as sales and purchases despite a lack of evidence of genuine transactions or banking links.

SEBI started ⁠its probe ​into the company in 2024 after a complaint cited large, outstanding trade ​receivables.

SEBI appointed a forensic auditor who could verify only a fraction of the company’s reported numbers due to a lack of documentation, the regulator said.

(By Jayshree ​P Upadhyay, Rajendra Jadhav and Polina Devitt; Editing by Aditya Kalra and Thomas Derpinghaus)