Jewellery manufacturer Rajesh Exports Ltd. has issued a detailed clarification addressing what it terms "incorrect perceptions" surrounding an interim order from the Securities and Exchange Board of India (SEBI). The regulatory body recently barred Rajesh Exports and its founder, Rajesh Mehta, from accessing the securities market while an investigation proceeds.
The company's response comes after SEBI alleged that Rajesh Exports misrepresented approximately Rs 15.15 lakh crore, or 99.80 percent, of its subsidiaries' revenues between fiscal years 2021 and 2025. SEBI's interim order also raised concerns about the alleged diversion of company funds without proper approvals or disclosures, and a lack of consistent public disclosure for its overseas subsidiaries' financial statements.
In a stock exchange filing, Rajesh Exports outlined a 10-point rebuttal to SEBI's observations, expressing confidence that its submissions would clarify all suspicions:
Rajesh Exports' 10-Point Clarification to SEBI
- Financial Stability: Rajesh Exports asserts it is a completely debt-free company, operating without reliance on external finance for any of its operations.
- Limited Public Funding: The company stated it has only raised funds from public offerings once, via an initial public issue in 1995, which amounted to just Rs 10 crore.
- No Domestic Equity Placements: Rajesh Exports clarified that it has never made any equity placements to domestic institutions.
- Accurate Reporting: The firm vehemently denied any misreporting, affirming that all its filings, financial figures, and reported revenues are true and genuine.
- Interim Order Status: The company emphasized that the SEBI order is strictly interim, merely raising suspicions on certain aspects without reaching any conclusive adverse findings.
- No Wrongdoing: Rajesh Exports firmly stated that neither the company nor its personnel are involved in any wrongdoing or misrepresentations.
- Revenue Misinterpretation: A key point of contention, the company explained that its substantial consolidated revenues are primarily derived from Valcambi, its Switzerland-based subsidiary. Valcambi, described as the world's largest and most reputed gold refinery, sells gold bullion to major banks, central banks, and other large entities globally.
- Rejection of Speculation: Rajesh Exports dismissed media reports and social media postings regarding "scam," "fraud," "inflated revenues," or "placement of shares to LIC" as entirely incorrect, out of place, and speculative.
- Transparent Operations: The company affirmed its engagement in transparent and straightforward operations that contribute positively to both the national and global economy.
- Mitigation Efforts: Rajesh Exports is actively working to address each concern raised in the SEBI interim order, preparing explanations, documents, and solid evidence. The company expressed confidence that SEBI will appreciate its submissions and clear all suspicions.
The SEBI interim order specifically highlighted that between 97 to 99 percent of Rajesh Exports' consolidated revenue originated from its overseas subsidiaries, particularly Valcambi SA. The regulator's findings led to the allegations of significant revenue misrepresentation.
In the wake of these developments, shares of Rajesh Exports continued their downward trend, sliding 5 percent on Friday to close at Rs 99.45. The stock has seen a significant decline of 46.16 percent over the past six months.