Rajesh Exports shares hit 5% lower circuit for third session on alleged Rs 15.15 lakh crore fraud

Shares of Rajesh Exports (REL) tumbled 5% to hit the lower circuit at Rs 94.50 on Monday, marking the third consecutive session of sharp losses after market regulator Sebi accused the corporate of orchestrating an elaborate monetary fraud involving alleged income inflation of Rs 15.15 lakh crore over time, private gold trades purportedly handed off as company gross sales, and investments of Rs 1,035 crore in gold mines.

In its findings, Sebi alleged accounting irregularities, diversion of firm funds into private accounts, and a sample of conduct aimed toward deceptive traders. The regulator additionally flagged lapses by the corporate’s auditors and stated each Rajesh Exports and its auditors failed to completely cooperate with the investigation.

In its 109-page interim order dated June 3, Sebi stated its investigation and forensic examination revealed prima facie proof suggesting that almost 97-99% of the corporate’s reported income could have been inflated. The regulator described the alleged discrepancies as “egregious and unparalleled”.

Pending additional instructions, Sebi has barred Rajesh Mehta from shopping for, promoting or in any other case dealing in securities of Rajesh Exports. The regulator has additionally directed the corporate to completely cooperate with investigators and guarantee true and honest disclosure of its monetary statements and related-party transactions.

“The acts of REL represent a deliberate machine, scheme and artifice to mislead and defraud traders dealing within the shares of REL by portraying an inflated and deceptive image of its operational scale, income and monetary well being,” Sebi stated in its order.

The case stems from a shareholder grievance acquired in March 2024 that raised issues over substantial commerce receivables mirrored within the firm’s accounts. Following a preliminary assessment, Sebi initiated an in depth investigation masking the interval from April 2020 to March 2024 and appointed BDO India Companies because the forensic auditor.

Apart from proscribing Rajesh Mehta from dealing within the firm’s securities, Sebi has directed Rajesh Exports to furnish all pending info sought by investigators inside 30 days. The regulator has additionally ordered the appointment of a brand new forensic auditor to conduct a extra complete assessment of the corporate’s books and transactions.Rajesh Exports has denied the allegations. In a press launch issued on Thursday, the corporate stated the revenues reported in its monetary statements had been correct and contended that Sebi’s conclusions had been primarily based on a misunderstanding between income and EBITDA figures at Swiss refiner Valcambi SA, an oblique subsidiary of the corporate.

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