Stock Market: Rajesh Exports shares hit lower circuit limit post SEBI order

Shares of Rajesh Exports Ltd dropped by 5 per cent to hit the lower circuit limit on Thursday, June 4. This comes after the Securities and Exchange Board of India (SEBI) claimed large-scale misrepresentation of financial statements and diversion of funds in gems and jewellery firm.

The capital markets regulator has even barred its promoter and CEO Rajesh Mehta from dealing in the company’s securities.

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As per the latest updates, the firm’s stock declined by 4.99 per cent to ₹104.65 and reached its lower circuit limit on the BSE. On the NSE, shares of Rajesh Exports edged lower by 4.99 per cent and hit the lower circuit limit of ₹103.92.

In a 109-page interim order on Wednesday, SEBI asked the company to make true and fair disclosures of its financial statements along with related party transactions and other disclosures under the Listing Obligations and Disclosure Requirements (LODR) regulations, PTI reported.

During its investigation in the matter, SEBI has claimed to have found out misrepresentation in financial statements along with instances of routing and layering of funds via personal accounts and related entities. This was done without adequate disclosures or supporting documentation.

The markets watchdog had issued repeated summons to the company and provides multiple opportunities to furnish true financial statements, but there was no satisfactory response.

Besides this, SEBI has even claimed that there was no cooperation from the company’s statutory auditors. As per the order, during the deposition, they had promised to provide audit working papers, but failed to do so.

The SEBI report further highlights about 97-99 -er cent of the company’s revenue was inflated and unheard of.