SEBI’s Rajesh Exports Case: Valcambi CEO Says Refiners Are “Service Providers,” Not Gold Buyers

India’s capital markets regulator has received unexpected support for its interim findings against Rajesh Exports from an unlikely source—the Chief Executive Officer of its Swiss refining subsidiary, Valcambi. Comments made by Valcambi CEO Simone Knobloch in a recent interview have reignited questions over the accounting treatment of massive gold transactions that form the basis of SEBI’s ongoing investigation into the company.

The controversy stems from an interim order issued by the Securities and Exchange Board of India (SEBI), which alleged that Rajesh Exports may have misrepresented approximately ₹15.15 lakh crore in consolidated revenue over a five-year period from FY21 to FY25. According to the regulator, a substantial portion of this revenue was attributed to overseas operations, particularly those linked to Switzerland-based Valcambi and related entities.

CEO Describes Refiners as Service Providers

In the interview, Valcambi’s CEO explained that gold refiners are primarily service providers rather than buyers or sellers of gold. She noted that large refiners typically receive gold supplied by banks, bullion dealers, or metal traders and process it on their behalf.

According to her explanation, refiners do not generally act as principals in gold transactions. Instead, they provide refining and processing services while ownership and trading of the underlying gold remain with financial institutions and traders.

These remarks have attracted attention because they appear broadly consistent with SEBI’s concerns regarding the enormous revenues reported by Rajesh Exports and its overseas subsidiaries.

SEBI Questions Massive Revenue Reporting

SEBI’s interim order highlighted what it described as a significant mismatch between the revenues reported by various entities within the group.

The regulator noted that Rajesh Exports reported consolidated revenues of nearly ₹15.15 lakh crore during the five-year period under examination, with approximately 97–99 percent of the turnover originating from overseas subsidiaries.

However, SEBI observed that Valcambi’s standalone audited financial statements reflected revenues that were only a fraction of the amounts reported at the consolidated level.

One of the key issues identified by the regulator relates to the accounting treatment adopted for gold transactions. According to SEBI, the group appears to have recognized the gross value of gold transactions as revenue rather than reporting only refining or processing income. The regulator stated that it was not provided with sufficient supporting documentation, customer information, invoices, or accounting explanations to justify such treatment.

SEBI expressed concern that this approach could have resulted in a substantial inflation of reported revenues, potentially creating a misleading impression for investors and market participants.

Revenue Gap Under Scrutiny

The regulator pointed to a striking disparity in reported figures for 2023.

According to the interim findings, Valcambi SA reported standalone revenue of approximately ₹542.68 crore. In contrast, Global Gold Refineries (GGR), the immediate parent entity associated with Valcambi, reported consolidated revenue of around ₹2.93 lakh crore, while Rajesh Exports disclosed consolidated revenue of approximately ₹2.81 lakh crore.

SEBI questioned the basis for such a substantial difference and indicated that, at the interim stage, it was not convinced by the company’s explanation that Valcambi’s standalone accounts reflected only processing income whereas the group-level accounts recognized the full value of gold transactions.

The regulator has sought additional evidence and explanations to establish whether the accounting treatment adopted by the company was appropriate and in compliance with applicable standards.

Rajesh Exports Denies Allegations

Rajesh Exports has strongly contested SEBI’s findings and rejected allegations of financial misrepresentation.

The company has argued that the regulator incorrectly compared Valcambi’s standalone financial statements with consolidated group accounts, leading to a misunderstanding of how revenues are recorded within the gold refining business.

According to the company, its financial disclosures accurately reflect the nature of its operations and comply with applicable accounting requirements. Rajesh Exports has stated that it intends to submit detailed documentation to rebut each of the allegations made in the interim order.

Spotlight on the Gold Supply Chain

The comments from Valcambi’s CEO have added a fresh dimension to the debate because they underscore the role of refiners as processors rather than principal traders.

If refiners primarily earn service fees while banks, bullion houses, and metal traders own and transact the underlying gold, questions naturally arise regarding the counterparties, transaction structures, and accounting treatment that contributed to the extraordinarily high revenues reported by the group.

As a result, regulatory attention may increasingly focus on the broader chain of entities involved in these transactions and the basis on which revenues were recognized across different levels of the corporate structure.

Interim Findings, Final Verdict Awaited

SEBI’s order remains an interim measure, and the allegations have not yet been conclusively adjudicated. The regulator has also flagged certain domestic transactions that it believes may have violated regulatory requirements.

The final outcome will depend on further submissions, evidence, and regulatory proceedings. However, the remarks from Valcambi’s chief executive have intensified scrutiny of one of the largest revenue reporting controversies in Indian corporate history, raising important questions about the distinction between processing income and gross transaction value in the global gold refining business.