New Delhi. Bengaluru-based gold jewellery and export major Rajesh Exports is facing a major setback as the Ministry of Heavy Industries (MHI) is reportedly preparing to review its inclusion under the Production-Linked Incentive (PLI) scheme for advanced chemistry cell (ACC) battery storage. The development comes after the Securities and Exchange Board of India (SEBI) passed an interim order alleging large-scale financial irregularities, including revenue inflation and fund diversion.
PLI Status Under Review
According to official sources, there is a strong internal view within the ministry that the company may be removed from the PLI beneficiary list. The final decision is expected to be taken after the matter is placed before the Union Minister for Heavy Industries, who is likely to review the SEBI findings before issuing directions.
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The controversy stems from a 109-page ex parte interim order issued by SEBI on June 3, 2026, in which the regulator alleged that Rajesh Exports significantly inflated its revenues between FY21 and FY25. The order claimed that nearly 99.8% of the revenues attributed to its subsidiaries were materially misrepresented, amounting to an alleged inflation of around ₹15.15 lakh crore over the period.
SEBI Flags Governance Lapses
SEBI has also raised concerns over fund diversion, opaque related-party transactions, and disclosure failures linked to two entities associated with the company’s lithium-ion battery business, Elest Pvt Ltd and ACC Energy Storage Pvt Ltd. The regulator stated that these practices indicated serious governance lapses and possible financial manipulation.
In a further regulatory action, SEBI has barred the company’s promoter and chairman Rajesh Mehta from buying, selling, or dealing in securities of the firm until further notice. The regulator has also ordered a fresh forensic audit of the company’s financial records to examine the extent of alleged irregularities and trace fund movements.
The Ministry of Heavy Industries, which administers the battery storage PLI programme, is currently examining the SEBI order to determine whether the company continues to meet eligibility criteria under the scheme. Officials indicated that the findings could have significant implications for the firm’s participation in India’s strategic battery manufacturing push.
Company Denies Allegations
Rajesh Exports has, however, denied the allegations made in the SEBI interim order and stated that it is fully cooperating with the ongoing investigation. The company maintains that its financial disclosures are accurate and compliant with regulatory norms.
The case has triggered wider concern in policy and market circles due to the scale of the allegations and the company’s involvement in the emerging battery energy storage sector. Industry observers note that PLI schemes are designed to support companies in strategic manufacturing sectors, and any integrity concerns could lead to stricter eligibility scrutiny across beneficiaries.
Financial analysts also point out that the regulatory action has already impacted investor sentiment, with increased volatility observed in the company’s market performance following earlier updates on the SEBI probe. The fresh possibility of removal from the PLI scheme could further affect long-term expansion plans in the battery storage segment.
Forensic Audit To Trace Fund Flows
Meanwhile, SEBI’s investigation continues, with a forensic audit expected to provide deeper insights into the company’s financial structure, subsidiary operations, and inter-company transactions. Authorities are also reviewing whether additional regulatory or legal actions may be warranted depending on the audit findings.
Government officials have emphasized that all companies benefiting from public incentive schemes must adhere to strict transparency and compliance standards. Any deviation, they said, would be addressed in accordance with policy guidelines and regulatory provisions.
The final decision on Rajesh Exports’ status under the PLI scheme is expected in the coming days after inter-ministerial consultations and review of SEBI’s findings.
