The Securities and Exchange Board of India (Sebi) has backed its restrictions on Rajesh Exports Ltd and its managing director Rajesh Mehta, directing them to cooperate with an ongoing investigation into the company’s financial disclosures and transactions, while barring Mehta from dealing in the company’s securities until further orders.
In a confirmatory order issued on Wednesday, Sebi said the company and Mehta must provide documents, information and explanations sought by the investigating authority. Rajesh Exports must also ensure truthful, accurate and complete disclosures in its financial statements, related-party transactions and other material information under applicable securities regulations.
The regulator directed a newly appointed forensic auditor to complete its work expeditiously and asked the investigating authority to conclude its probe without delay. The directions took immediate effect and will remain in force until further orders.
₹15-trillion mismatch
The order follows an interim order dated 3 June, which raised concerns over the company’s financial reporting, disclosures and cooperation with the investigation. The regulator said its prima facie findings indicate that Rajesh Exports overstated and misrepresented the group’s operational scale and financial performance between FY21 and FY25. It alleged that about ₹15.15 trillion, or 99.8% of revenue attributed to the company’s subsidiaries during the period, was misrepresented.
The order flagged a significant disparity between Rajesh Exports’ consolidated revenue and the standalone revenue reported by its Swiss subsidiary, Valcambi SA. For the five-year period from financial year 2020-21 to 2024-25, the company’s consolidated revenue was ₹15.45 trillion, while Valcambi’s standalone revenue was ₹3,027.38 crore.
Sebi said the difference raised concerns about the verifiability and reliability of the consolidated financial disclosures considering that about 97-99% of the company’s consolidated revenue was reported to originate from overseas subsidiaries and step-down subsidiaries.
Sebi also flagged inconsistencies in submissions made during the investigation. Customer-wise sales figures provided to the regulator varied across filings, while some customers appeared in one dataset but not in another. Sales figures for the same customers also differed across submissions. Rajesh Exports has failed to rebut this allegation so far.
The regulator also found that several information requests remained unanswered or had been only partially addressed. However, Sebi clarified that its findings in the confirmatory order are limited to whether the initial concerns have been rebutted at this stage. They do not constitute a final determination that the company or Mehta violated securities laws, the regulator said.
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