Shares of Rajesh Exports Ltd experienced a steep decline, locking in at its lower circuit limit on Monday. This marked the third straight session of circuit breaks and the sixth session of fall over the past seven trading days for the gold refiner and jewellery exporter.
SEBI Alleges Financial Fraud, Ministry Reviews PLI Status
The market turmoil follows a recent interim order from the Securities and Exchange Board of India (SEBI), which alleged massive financial fraud by the Bengaluru-based firm. Concurrently, a PTI report indicated that the Ministry of Heavy Industries (MHI) is expected to decide soon on removing Rajesh Exports from the list of beneficiaries under the production-linked incentive (PLI) scheme for advanced chemistry cell (ACC) battery storage.
SEBI Chairman Comments on Judicial Process
When questioned about Rajesh Exports, SEBI Chairman Tuhin Kanta Pandey stated that SEBI does not comment on individual cases as a matter of principle. He added, "It is a judicial process in which orders are issued, and they have to be accordingly comply with it through a manner which is going to be as per the law." Pandey made these remarks on the sidelines of the ICICI Securities India Investor Conference.
Company Denies Allegations, Cites Accounting Error
Rajesh Exports has reportedly submitted hundreds of gigabytes of documents to SEBI, asserting that the market regulator may have overlooked crucial files. Rajesh Mehta, a company representative, told PTI that SEBI's interim order, dated June 3, which alleged revenue inflation of Rs 15.15 lakh crore between FY21-FY25, was based on a fundamental accounting error. Mehta claimed the regulator mistakenly treated the company's EBITDA figures as revenue. "We had given them 300-400 GB documents, running into lakhs of pages. I think they have not been able to find the correct documents. The whole confusion has happened there," Mehta explained.
The ongoing developments underscore significant challenges for Rajesh Exports as it navigates regulatory scrutiny and potential impacts on its business operations.