Daijiworld Media Network – Mumbai
Mumbai, Jun 4: Capital markets regulator Securities and Exchange Board of India (SEBI) has barred Rajesh Exports Chairman and Managing Director Rajesh Mehta from dealing in the company’s securities until further orders, citing serious concerns over alleged manipulation of financial statements and non-cooperation with regulatory investigations.
In an interim order issued on Wednesday, SEBI also directed Rajesh Exports to extend full cooperation to investigating officers and forensic auditors examining the company’s books of accounts.
According to SEBI’s preliminary findings, the company allegedly manipulated its financial records over several years beginning FY2020-21, particularly revenues attributed to its overseas subsidiaries, resulting in a significantly inflated picture of its business operations and financial performance.
The regulator noted that between 97 and 99 per cent of the company’s reported revenue appeared to be inflated. SEBI further observed that Rajesh Exports had allegedly misrepresented approximately Rs 15.2 lakh crore in revenues attributed to subsidiaries during the period from FY2020-21 to FY2024-25, accounting for nearly 99.8 per cent of such revenues.
“The aforesaid conduct appears to have prima facie enabled Rajesh Exports to portray an inflated and misleading picture of its operational scale, consolidated financial position and financial health before investors and the securities market,” the order stated.
SEBI also flagged discrepancies in the company’s claims regarding investments in African gold mines. Rajesh Exports had announced in FY2022-23 that it had invested Rs 1,035 crore in gold mining assets in Africa. However, the regulator found no evidence of such investments in the standalone financial statements of the company or its subsidiaries.
The investigation and forensic audit reportedly uncovered additional practices that appeared aimed at misleading investors regarding the company’s trade receivables, trade payables and overall financial position.
Besides imposing restrictions on Rajesh Mehta and directing the company to cooperate with investigators, SEBI has forwarded a copy of its order to the National Financial Reporting Authority (NFRA) for possible action against the company’s statutory auditors, BSD & Co.
The matter remains under investigation, and SEBI may issue further directions based on the outcome of the ongoing probe.