Shares of Rajesh Exports dropped 5% and triggered the lower circuit on Thursday following an interim order from the Securities and Exchange Board of India (SEBI). The order accused the company and its promoter, Rajesh Mehta, of financial irregularities, lack of cooperation in the investigation, and potential revenue overstatement.
The stock hit a lower circuit at Rs 104.65, marking a 4.99% decline from the previous close on the BSE. SEBI raised concerns that almost 97-99% of the company’s reported revenue might have been inflated, describing the noted aberrations as unprecedented.
SEBI Whole-Time Member Kamlesh Chandra Varshney emphasized the need for urgent regulatory action to safeguard investors and maintain market integrity. The regulator prohibited promoter Rajesh Mehta from engaging in any transactions involving securities of Rajesh Exports.
The market watchdog directed Rajesh Exports to fully assist investigators and ensure accurate disclosure of financial statements and related-party transactions. The investigation, initiated in response to a shareholder complaint in March 2024, focused on substantial trade receivables in the company’s financial records.
SEBI’s order highlighted Rajesh Exports’ failure to provide access to crucial accounting systems and financial records during the investigation, impeding the forensic auditor’s ability to verify transactions independently. The regulator also scrutinized financial reporting in overseas subsidiaries, expressing concerns over fund routing practices that obscured their origin and destination.
