Embattled Rajesh Exports said on Friday that it has never indulged in any misreporting and all its filings, financial numbers including revenue, are genuine. The second clarification in two days by the Bengaluru-based jewellery export firm comes as pressure mounts over it for reporting misrepresented consolidated revenues aggregating to Rs 15.15 lakh crore, representing 99.80% of the total consolidated revenue for the period FY 2020-21 to FY 2024-25.
“The major point misinterpreted with regard to the revenues of the company is totally misplaced. The huge revenues reported in the consolidated financials of the company are primarily from Valcambi, which is engaged in refining and the sale of gold bullion to major banks, central banks and other large bullion entities across the world. It is a globally accepted fact that Valcambi is the world’s largest, finest and most reputed gold refinery,” said Rajesh Exports in a regulatory filing.
It stated that the company or any of its personnel are not involved in any wrongdoing or misrepresentations and some of the media reports and social media postings with regard to scam, fraud, inflated revenues, and placement of shares to Life Insurance Corporation of India (LIC) are “totally incorrect, out of place and speculative.”
Rajesh Exports’ statement could not calm investors’ sentiment on the exchanges as the stock fell another 5%, its lower circuit, on Friday.
In one of the biggest corporate misreporting cases, the Securities and Exchange Board of India (SEBI) barred Rajesh Exports chairman and managing director Rajesh Mehta from the capital market, alleging large-scale financial misrepresentation, disclosure lapses and non-cooperation with an investigation into the company's financial statements.
Based on its preliminary findings, SEBI alleged that Rajesh Exports had misrepresented Rs 15.15 lakh crore of revenues attributable to subsidiaries during FY21-FY25, representing about 99.8% of such revenues. The regulator said the disclosures appeared to have presented an inflated and misleading picture of the group's operational scale and financial health to investors.
The market regulator's probe, covering the period from April 2020 to March 2024, was initiated after a shareholder complaint raised concerns over potential financial misrepresentation relating to large outstanding trade receivables. A key finding of the order relates to the company's overseas subsidiaries, particularly Swiss-based entities that account for the overwhelming majority of its consolidated business.
Rajesh Exports said that it is in the process of mitigating each one of the concerns raised in the SEBI interim order with explanation, documents and solid evidence. The company added that it is confident that SEBI will appreciate the submissions of the company and clear all the suspicions raised in the interim order.
