Amid regulatory scrutiny from the Securities and Exchange Board of India (Sebi), Rajesh Exports Chairman Rajesh Mehta has publicly distanced himself from investment decisions made by the state-run insurer, Life Insurance Corporation of India (LIC).
Mehta Disclaims LIC Connection
Mehta clarified that LIC's 10.80 percent stake in Rajesh Exports was acquired through the open market over approximately two decades, not through direct sales from promoters or the company. "LIC has not purchased the shares yesterday or last year. LIC's purchases are over a period of time, approximately 20 years. These shares have been taken by LIC from the open market, from the stock market," Mehta told a news agency. He further emphasized, "We don't even know where LIC's office is. We have no contact, no connection. This decision of buying shares through the secondary market is their own decision in a prudent commercial manner."
Sebi's Interim Order and Allegations
The company's statements follow an interim order by Sebi, which has barred Rajesh Exports and its founder, Rajesh Mehta, from accessing the securities market while an investigation is underway. Sebi's order alleges that Rajesh Exports misrepresented a significant portion of its revenue, totaling approximately Rs 15.15 lakh crore (99.80 percent) of its subsidiaries' revenues between fiscal years 2021 and 2025. The regulator highlighted that most of the consolidated revenue (97–99 percent) originated from its overseas subsidiaries, particularly Switzerland-based Valcambi SA, but the company allegedly failed to consistently disclose their financial statements publicly.
Rajesh Exports' Clarification
In response to the interim order, Rajesh Exports issued a detailed 10-point clarification to the stock exchanges, aiming to address what it termed "incorrect perceptions." Key points from their clarification include:
- Rajesh Exports is a debt-free company, not reliant on external finance.
- The company has only raised Rs 10 crore from its initial public offering in 1995 and has not made any equity placements to domestic institutions.
- It refutes claims of misreporting, asserting all filings and financial numbers are true and genuine.
- The company stresses that the Sebi order is interim, raising suspicions but containing no conclusive adverse findings.
- It explicitly denies any wrongdoing or misrepresentations by the company or its personnel.
- The company clarifies that its substantial consolidated revenues primarily stem from Valcambi, a globally recognized gold refinery.
- Rajesh Exports rejects media and social media reports of "scam, fraud, inflated revenues, placement of shares to LIC" as incorrect and speculative.
- The company affirms its commitment to transparent operations.
- Rajesh Exports is actively preparing to address all concerns raised by Sebi with explanations, documents, and evidence.
Following these developments, shares of Rajesh Exports experienced a decline, sliding 5 percent to Rs 89.80 and reflecting a 52.30 percent drop over the preceding six months.