Revenues not overstated; SEBI order is not final, says Rajesh Exports

Rajesh Exports Ltd informed the BSE on Thursday that the order passed by the Securities & Exchange Board of India (SEBI) is an interim order, not a final one, following SEBI’s allegation that the company appears to have prima facie overstated its revenues.

Rajesh Exports Ltd Chairman Rajesh Mehta informed the BSE in a statement on Thursday that, “The (SEBI) order is interim and SEBI has not reached any adverse conclusion on any aspect. The revenues declared by the company are correct and there is no overstating of revenues. There seems to be some communication gap and confusion between SEBI and the company. The company is clarifying all aspects to SEBI by submitting all required and relevant documents.”

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“The company is confident that SEBI in its wisdom will clarify the situation and arrive at the correct conclusion based on the authenticated documents the company is submitting,” Rajesh Exports Ltd informed the BSE.

“The company rejects all adverse media reports regarding SEBI’s interim order. The company will shortly issue a media clarification that will settle the unnecessary speculation in the media,” according to the statement by Rajesh Exports.

The statement was issued to the stock exchange after SEBI passed a 109-page interim order alleging that Rajesh Exports misrepresented consolidated revenues aggregating about Rs 15.15 lakh crore between FY 2020-21 and FY 2024-25, which accounts for nearly 99.8 per cent of the company’s total consolidated revenue during that period.

“I prima facie find that the pattern of routing substantial sums through the personal bank accounts of Rajesh Mehta and Siddharth Mehta, coupled with the absence of approvals, non-disclosure and inconsistent explanations, demonstrates a systemic failure of corporate governance, concealment of material information and deliberate circumvention of regulatory requirements,” SEBI Whole Time Member Kamlesh Chandra Varshney mentioned in the SEBI’s interim order.

SEBI also alleged that Rajesh Exports Ltd received repeated summons and several opportunities to furnish true and fair financial statements, but the company’s statutory auditors failed to cooperate with SEBI.

SEBI began probing Rajesh Exports after receiving a complaint on March 11, 2024 from a Rajesh Exports Ltd shareholder who alleged potential financial misrepresentation in its books regarding a large sum of trade receivables outstanding for more than two years.

According to SEBI, its interim order resulted from a four-year investigation carried out between April 1, 2020 and March 31, 2024.