After facing flak from the equity markets regulator for misrepresentation of revenue to the tune of Rs 15.15 lakh crore, Rajesh Exports has issued a statement addressing the action against the company.
It said that the company has not over stated revenues and some was some type of confusion between the company and the Securities and Exchange Board of India (Sebi).
“The revenues declared by the company are correct and there is no over stating of revenues. There seems to be some type of communication gap and confusion between Sebi and the company,” the company said in a statement issued on Thursday.
Rajesh Mehta, the chairman and managing director of the company, said in the statement that the Sebi order was interim in nature with no adverse conclusion on any aspect.
Mehta has been barred by the Sebi from accessing securities markets.
“The company is in the process of clarifying all aspects to Sebi by submitting all the required and relevant documents. The company is confident that Sebi in its wisdom will clarify the situation and arrive at the correct conclusion based on the authenticated documents which are in the process of submission by the company,” Mehta said in the statement.
The company also rejected “adverse media reports” with regard to the interim order of Sebi.
It said that the company will issue a media clarification “which would clarify and settle the unnecessary speculation in the media.”
The statement comes after the Securities and Exchange Borad of India issued a notice to the company for alleged misrepresentation of revenue worth Rs 15.15 lakh crore and barred Mehta from accessing the securities markets.
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.
