Financial scandal in India leads to Switzerland

Valcambi in Ticino processes around 900 tonnes of gold each year. This is currently worth around CHF100 billion ($125 billion) Francesca Volpi / Getty Images

Authorities have uncovered a scandal involving accounting irregularities worth $159 billion (CHF127 billion). A gold refinery in Ticino and a holding company in Lucerne are at the centre of the case.

Rajesh Exports is India’s fourth-largest company by turnover. But it now appears that much of its reported business was little more than hot air. The figures reported by its Swiss subsidiaries were inflated, while actual earnings were 99% lower than stated. This is the conclusion of a more than 100-page reportExternal link by the Securities and Exchange Board of India (SEBI).

Rajesh: growing up with gold

Rajesh Exports is a listed company in India and is big in the gold business, making gold jewellery and supplying thousands of shops. The company is based in Bangalore and is controlled by company founder Rajesh Mehta, who is also the company’s CEO and President.

Indian authorities accuse Rajesh Exports of deception, fraud, lack of transparency and manipulation. The company allegedly overstated its revenue to mislead investors. According to the report, the balance sheet was inflated by $159 billion between April 2020 and March 2025 through fictitious earnings.

Swiss companies in the spotlight

Rajesh Exports controls two Swiss companies that are at the centre of the investigation: the Valcambi gold refinery in Ticino and the holding company Global Gold Refineries AG in Lucerne.

A complex corporate structure involving two Swiss companies. Everything is controlled from India. (The percentage refers to the shareholding). Securities and Exchange Board of India (Sebi) / SRF

According to the Indian financial regulator, business figures from Ticino were allegedly multiplied through the Lucerne-based holding company.

Magic: from $358 million to $159 billion

At the start of the chain is the Valcambi gold refinery in Ticino. The company processes more than seven tonnes of gold per day and employs 177 people. What makes the business unusual is that it works with gold, one of the world’s most valuable precious metals. The dispute centres on how the company’s earnings should be calculated and recorded.

Valcambi’s Swiss headquarters in Balerna, on the border with Italy. Francesca Volpi / Getty Images

Valcambi records revenue from the services it provides, namely refining and remelting gold. The gold arrives at the refinery, is processed into bars and coins, and is then shipped to major investors and central banks. According to the Indian regulator, Valcambi generated CHF358 million in revenue over five years.

However, through the Lucerne holding company, the Indian owners reportedly recorded the value of the gold sales as revenue rather than only the value added by the work carried out in Ticino. Regulators argue that the real value lies in the refining work, not in the gold itself.

However, through the Lucerne holding company, the Indian owners reportedly recorded the value of the gold sales as revenue rather than only the value added by the work carried out in Ticino. Regulators argue that the real value lies in the refining work, not in the gold itself.

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Investors lose confidence

The investigation began almost three years ago. Since then, shareholders have lost confidence. Rajesh Exports’ share price has fallen by more than 80% over three years, wiping out around $2.7 billion in investor value since the beginning of 2023.

In its interim report, the regulator also criticised a lack of transparency. Rajesh Exports allegedly refused to provide investigators with a complete list of Valcambi’s clients, citing Swiss data protection rules. The company’s refusal to hand over the customer list has raised questions about what it may be trying to conceal.

Consequences for Switzerland

The booking scandal in India could damage Switzerland’s reputation as a financial centre and in particular its role as an international gold hub. In addition to Valcambi, there are other refineries where gold is remelted. Switzerland is a world leader in this business. Valcambi is repeatedly accused of a lack of transparency: three years ago, the company left the Swiss Association of Precious Metals Manufacturers and Traders following disagreements.

In several statements, Rajesh Exports has rejected the regulator’s allegations, arguing that the findings are based on a misunderstanding and that the document is only an interim report. Valcambi declined to comment to the Reuters news agency, stating that the case concerns the controlling shareholder.

Translated from German using AI/amva

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