Tainted Rajesh Exports is large defaulter of Canara Bank with more than Rs. 2485 crores from 2021. Then why LIC continued to invest? Why no case by CBI?

With Rs.2,485 crore in outstanding dues and fresh regulatory scrutiny, attention is turning to the roles of Canara Bank, LIC, and investigative agencies

J Gopikrishnan

June 8, 2026

With Rs.2,485 crore in outstanding dues and fresh regulatory scrutiny, attention is turning to the roles of Canara Bank, LIC, and investigative agencies

Rajesh Exports controversy deepens after SEBI findings

Controversial businessman Rajesh Mehta, who led Rajesh Exports, was recently caught by the Securities Exchange Board of India (SEBI) for inflating the revenue of more than Rs.15 lakh crore, is already a large defaulter of Canara Bank with more than Rs.2,458 crore loan dues. ‘The Pioneer’ newspaper on March 16 reported that Rajesh Exports owes more than Rs.2,285 crores, citing Canara Bank’s January 2026 data of large defaulters filed to the rating agency TransUnion CIBIL.[1]

As per conducting a detailed analysis of the TransUnion CIBIL data filed by Canara Bank, Rajesh Exports owes a total of Rs.2,458 crores, and the loan amount is split into six entries of Rs.409 each. Canara Bank is now conducting recovery suits at the Debit Recovery Tribunal (DRT) in Chennai, and three Directors of the company are shown as personal guarantors to this huge loan. The Directors shown as personal guarantors are Rajesh Mehta and his partners, Prashant Mehta and S Pramasivan.

Interestingly, Canara Bank has not approached CBI or ED for cheating against Rajesh Exports and its Directors, though it filed a civil recovery case of just Rs.452 crore in 2021. Rajesh Exports, which is now caught by SEBI for inflated revenue of Rs.15 lakh crore, also filed a counter case in DRT against the bank, seeking a loss of more than Rs.20,456 crore. However, DRT in 2023 dismissed the fake claim of Rajesh Exports, citing that they had produced fake bills.[2]

After filing fake claims by Rajesh Exports in DRT and after the Tribunal termed these claims as fake, why Canara Bank has not approached CBI and ED is a billion-dollar question. The DRI order in 2023 clearly says how Rajesh Exports diverted the funds from Canara Bank through its subsidiary gold refinery, Valcambi SA in Switzerland.

Now, SEBI’s recent report of 109 pages says that though Mutual Funds stopped investing in Rajesh Export, Life Insurance Corporation (LIC) invested in 10.8 percent of the tainted company. It is well known that the LIC won’t invest in such fragile companies without political patronage. Now the records of Canara Bank suggest that tainted Rajesh Exports is the 10th largest defaulter from 2020 with Rs.2,485 crore.

The question that hangs in the air is why the bank has not filed a complaint to CBI against Rajesh Exports with fake bills and loan siphoning to a Swiss subsidiary gold refinery company, and LIC was allowed to continue investment in this tainted company, while a civil recovery suit was filed in DRT in Chennai in 2021.

Meanwhile, the media reported that the Ministry of Heavy Industries (MHI), headed by Union Minister Kumaraswami, is set to decide in the coming days on removing Rajesh Exports from the list of beneficiaries under the production-linked incentive (PLI) scheme for advanced chemistry cell (ACC) battery storage, after the SEBI last week passed an interim order alleging massive financial fraud by the Bengaluru-based firm. It is learned that Rajesh Exports, in 2022, bagged a PLI contract for manufacturing EV Batteries in India worth more than Rs.1,000 crore. Sources said, though the company claims the production is created in India, the major parts of EV Batteries are just imported from China and assembled in Indian factories.

[Writer is an Associate Editor of ‘The Pioneer’ newspaper]

Note:
1. Text in Blue points to additional data on the topic.
2. The views expressed here are those of the author and do not necessarily represent or reflect the views of PGurus.

Reference:

[1] Large defaulters leave PSU banks chasing Rs. 29 lakh crore – Mar 28, 2026, J Gopikrishnan

[2] Rajesh Exports puzzle gets bigger – Jun 08, 2026, The Pioneer

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