By Jayshree P Upadhyay

MUMBAI, June 5 (Reuters) - 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." Valcambi and LIC have not responded to

Reuters queries.

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.