Stock Of Rajesh Exports Hits Lower Circuit As Sebi Alleges Misrepresentation Of Revenue

The stock of Rajesh Exports hit lower circuit on Thursday after the markets regulatory issued a notice to the company for alleged misrepresentation of revenue worth Rs 15.15 lakh crore and barred its promotor from accessing the securities markets.

The stock opened at Rs 104.65 apiece to hit lower circuit. This is 5 percent lower than the previous close of Rs 110.15 apiece.

The decline came after the equity markets regulator Securities and Exchange Board of India (Sebi) on Thursday passed an interim ex-parte order against the company and its chairman and managing director Rajesh Mehta for alleged financial misrepresentation.

The regulator barred Rajesh Exports and its promoter-chairman Rajesh Mehta from accessing the securities market.

Sebi alleged that the company misrepresented consolidated revenues aggregating to approximately Rs 15.15 lakh crore. This represents about 99.80 percent of the total consolidated revenue of the company for the period FY21 to FY25.

The markets regulator alleged that the company attributed about 97–99 percent of its consolidated revenue from its foreign subsidiaries, particularly Valcambi SA.

“Upon analysis of the ‘Revenue from Operations’ and ‘Profit After Tax’ of REL on standalone and consolidated basis, as disclosed in its financial statements, it is observed that significant component of REL’s consolidated operations are emanating from its subsidiaries/step-down subsidiaries,” the Sebi order said.

However, upon comparison, it was observed that “the standalone revenues of Valcambi SA constituted less than 0.50 percent of the consolidated revenues reported by GGR and REL, which appears fundamentally inconsistent with REL’s repeated assertion that Valcambi SA was the principal operating entity driving the group’s revenues,” the Sebi order said.

According to Sebi, Rajesh Exports recognised gross gold transaction values rather than only refining or processing income, without providing adequate supporting records, customer details, invoices, or accounting justification thereby potentially inflating revenues and misleading investors.

Rajesh Exports is a gold refiner and manufacturer of gold products. It exports its products to various countries around the world.

It also sells its products in wholesale and retail in India and through its own retail showrooms under the brand name ‘SHUBH Jewellers’.

It is a mid-cap company having Rs 3,210crore market capitalization as on June 3.