NFRA launches probe into the auditors of Rajesh Exports after SEBI reference
June 17, 2026
India's audit regulator, NFRA, has launched an examination into the role of auditors at Rajesh Exports following a SEBI reference regarding an alleged ₹15.15 lakh crore financial misrepresentation.
India’s audit regulator National Financial Reporting Authority (NFRA) has begun examining the role of auditors in the accounting practices of Rajesh Exports after receiving a reference from the Securities and Exchange Board of India (Sebi) which had issued an interim order in early June against Bengaluru-based Rajesh Exports and its chairman over a massive alleged financial misrepresentation of Rs 15.15 lakh crore across five financial years (FY21 to FY25).
“We are examining the Rajesh Exports‘ case. We have received a reference from Sebi. We are looking from the auditors’ perspective that whether they have done their job properly,” NFRA chairman Nitin Gupta told FE. While the NFRA chief did not elaborate on the scope or timeline of the examination, he said that the exercise would take time. NFRA’s involvement in scrutinising the work of auditors could lead to regulator imposing penalties and debar audit firms or individual auditors in case of audit lapses.
Institutional Trust
Addressing CFOs and finance professionals at an ASSOCHAM event, Gupta stressed that transparent financial reporting and strong corporate governance are essential to sustaining investor confidence in India’s rapidly growing economy.
“High-quality financial reporting is the foundational block for good corporate governance,” Gupta said adding that financial statements are not merely compliance documents but play a strategic role in building trust among investors and market participants.
He urged finance executives to present the company’s accounts in a manner that reflects its actual financial position, noting that in several enforcement cases handled by NFRA, preparers of accounts were aware of emerging issues but failed to present them transparently. “We could identify that the preparer of accounts was aware of the situation, but the things were not presented in a transparent manner. Probably, the CFOs require either the courage or the capacity to present the accounts in a transparent manner. In an era marked by geopolitical uncertainties, cybersecurity risks and AI-driven disruptions, trust can only be built through accountability, professional courage and a commitment to transparent disclosures,” Gupta said.
Stepping Up Enforcement
In the recent years, NFRA has stepped up its enforcement against audit failures, which includes significant disciplinary actions against the statutory auditors and audit firms of Coffee Day Enterprises, Reliance Capital and Brightcom Group for professional misconduct and audit failures. It has also simultaneously issued a bunch of audit advisories, circulars and practice toolkits which are aimed at improving the overall audit quality and financial reporting standards.
[The Financial Express]
