Shares of jewellery manufacturing giant Rajesh Exports have plunged by nearly 30% over the past seven trading sessions, hitting a 52-week low of Rs 77.05 on Friday. This significant market downturn follows an interim order issued by the Securities and Exchange Board of India (SEBI), which has barred the company and its founder, Rajesh Mehta, from accessing the securities market.
Regulatory Clampdown by SEBI
SEBI's interim order, issued as an investigation into Rajesh Exports continues, accuses the company of serious financial irregularities. The regulator alleges that Rajesh Exports misrepresented a substantial portion of its revenue—approximately Rs 15.15 lakh crore, or 99.80% of its subsidiaries' revenues—between fiscal years 2021 and 2025. Furthermore, SEBI claims the company diverted funds without necessary approvals or disclosures.
A key point of contention for SEBI is that nearly all of Rajesh Exports' consolidated revenue (97-99%) reportedly came from its overseas subsidiaries, particularly Valcambi SA, a Switzerland-based gold refinery. However, SEBI found that the company did not consistently disclose the financial statements of these subsidiaries in the public domain, raising transparency concerns.
Rajesh Exports Issues Clarification
In response to SEBI's interim order and the subsequent market reaction, Rajesh Exports released a 10-point clarification to stock exchanges. The company aimed to address what it termed "incorrect perceptions" surrounding the regulatory action.
Key points from Rajesh Exports' clarification include:
- The company asserts it is entirely debt-free and not reliant on external financing for its operations.
- It has only raised Rs 10 crore from a single initial public offering in 1995 and has not made any equity placements to domestic institutions.
- Rajesh Exports vehemently denies any misreporting, stating that all its financial filings and revenue figures are "true and genuine."
- The company emphasizes that the SEBI order is interim, raising only "suspicions" without "conclusive adverse findings."
- Regarding the revenue concerns, Rajesh Exports clarifies that its substantial consolidated revenues primarily stem from Valcambi (Switzerland), which is a globally recognized gold refinery supplying major banks and bullion entities.
- The company rejects media reports and social media postings suggesting "scam, fraud, inflated revenues," or share placements to LIC, labeling them "incorrect, out of place and speculative."
- Rajesh Exports states it is actively working to mitigate all concerns raised by SEBI, providing explanations, documents, and evidence, expressing confidence that SEBI will "clear all the suspicions."
The regulatory investigation is ongoing, and both Rajesh Exports and its Executive Chairman, Rajesh Mehta, remain barred from the securities market until its completion.