Rajesh Exports case quasi-judicial issue, says SEBI Chairman

Declining to comment on the action against Rajesh Exports, SEBI Chairman Tuhin Kanta Pandey on Monday, June 8, said the matter forms part of a quasi-judicial process and is being addressed via legal procedures.

“As a matter of principle, we do not comment on individual cases in the media. This is, in fact, a quasi-judicial process in which orders are issued, and they must be complied with or challenged through the procedures provided by law. Therefore, I will not be making any comments on the matter,” IANS quoted Pandey as saying on the sidelines of the India Investor Conference in Mumbai.

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This comes after the regulator barred Rajesh Exports promoter and CEO Rajesh Mehta from dealing in the gold refiner and jewellery exporter’s securities after alleging financial irregularities, diversion of funds and inadequate disclosures related to fund flows and related-party transactions.

For the third consecutive trading session, Rajesh Exports shares on Monday remained under pressure, hitting the lower circuit. It touched its lower circuit limit and an intraday low of ₹94.50 on the BSE, witnessing a decline of around 5 per cent.

In its interim order, SEBI’s investigation prima facie revealed instances of routing and layering of funds via personal accounts and related entities without adequate disclosures or supporting documentation.

It further stated that repeated opportunities were provided to furnish accurate financial statements, but the response remained unsatisfactory.

Meanwhile, Rajesh Exports on Sunday informed that it had submitted 300-400 gigabytes of documents to SEBI, but believed the watchdog had been unable to locate the correct files. It added that the company would resubmit all sought documents within 15 days to resolve the matter.

Rajesh Mehta told PTI that SEBI’s interim order of June 3 alleging revenue inflation of ₹15.15 lakh crore over FY21-FY25 was rooted in a fundamental accounting error wherein it took the company’s EBITDA figures and classified them as revenue.

“We had given them 300-400 GB documents, running into lakhs (of pages). I think they have not been able to find the correct documents. The whole confusion has happened there,” Mehta said.