Shares of Rajesh Exports were locked at the 5% lower circuit in morning trade on Thursday as regulatory scrutiny against the company intensified, triggering heavy selling pressure in the stock.
The decline came after reports emerged that the Serious Fraud Investigation Office (SFIO) is set to initiate a probe into the gold refining and jewellery major.
At around 10 am, the stock was stuck at its lower circuit limit of Rs97.02, marking a decline of 4.99%, reflecting heightened investor concerns over the mounting investigations.
The latest development follows a day after the Directorate of Enforcement (ED) revealed findings from search and seizure operations carried out at nine locations linked to Rajesh Exports and its associates under the provisions of the Foreign Exchange Management Act (FEMA).
According to the agency, preliminary investigations uncovered multiple irregularities, including suspected manipulation of share prices, missing documentation related to foreign transactions and unusual patterns in remuneration structures within the company.
The ED also highlighted discrepancies in salary structures, noting that the company’s Chief Financial Officer had allegedly not received any salary since 2020, while the Managing Director was drawing a monthly remuneration of approximately Rs17,000.
This was flagged as unusual given the company’s reported consolidated revenues of nearly Rs7.7 lakh crore.
In a parallel development, The Economic Times reported that the Ministry of Corporate Affairs has directed an SFIO investigation into Rajesh Exports.
Citing individuals familiar with the matter, the report stated that the probe will examine financial irregularities previously highlighted by the Securities and Exchange Board of India (Sebi).
Sebi had earlier issued an interim order on June 3, alleging that Rajesh Exports inflated its consolidated revenue over a five-year period.
The regulator claimed that the company attributed significant revenue to its overseas subsidiary, particularly Switzerland-based Valcambi SA, despite audited standalone accounts reflecting much lower figures.
Following Sebi’s order, the promoter was barred from trading or dealing in the company’s securities pending further proceedings.
The SFIO, which investigates serious corporate fraud cases under Section 212 of the Companies Act, 2013, can be directed to probe firms based on inputs from regulatory bodies or in the public interest.
Rajesh Exports has denied all allegations and said it intends to contest SEBI’s findings through appropriate legal channels.
