Congress Questions LIC's Stake in Firm under SEBI Investigation

The Indian National Congress has expressed worries over the Life Insurance Corporation of India's (LIC) substantial stake in Rajesh Exports Ltd, a company currently under scrutiny by the Securities and Exchange Board of India (SEBI). Congress leader Jairam Ramesh highlighted that LIC owns approximately 10.8% of Rajesh Exports, which has been implicated in a significant financial fraud, amounting to alleged revenue misrepresentation over a five-year period, totalling ₹15 lakh crore.

In a statement made on June 4, 2026, Ramesh described the figures related to the allegations as 'mind-boggling' and called for transparency in the investigations that are still ongoing. According to SEBI's interim report, dated June 3, 2026, there is a suggestion of extensive misrepresentation in the financial records of Rajesh Exports, which operates within the gold refining and jewellery sector.

This latest development comes after SEBI took decisive action by barring Rajesh Mehta, the company's promoter and Chief Executive Officer, from trading in the company's securities. Allegations suggest substantial diversion of funds and misleading financial disclosures, which resulted in a 109-page interim order from the regulatory body. The report stated that around 97-99% of Rajesh Exports' revenue may have been inflated, an assertion that Ramesh described as extraordinary and alarming.

SEBI's investigation has not only highlighted fraudulent misrepresentation but also non-cooperation from the company's statutory auditors, which raised further questions regarding the company's ethical practices. The authorities remarked that the company's auditors failed to provide essential documentation that could potentially clarify the alleged financial discrepancies.

Ramesh's concerns centre on how LIC could have overlooked such significant fraudulent activities, especially considering its considerable investment in such a politically sensitive company. He posited whether the acquisition of this substantial stake might have been influenced by directives from those in power. This opens up further dialogue on corporate governance and the accountability of financial institutions in India.

There are also significant risks for financial institutions, such as banks, that maintain considerable exposure to Rajesh Exports, exacerbating the need for thorough investigations into these allegations, according to Ramesh. The regulators have directed Rajesh Exports to ensure accurate and fair disclosures of its financial statements and related transactions under comprehensive Listing Obligations and Disclosure Requirements (LODR).

With investigations still ongoing, many are calling for greater oversight and stricter regulations to prevent potential corporate malfeasance in the future. SEBI's order also included an instruction to appoint a new forensic auditor to review the company's financial records given the prior challenges in obtaining compliance. The next steps in this unfolding saga will be crucial to restore confidence among investors and maintain the integrity of India's financial markets.