Rajesh Exports Chief Slams LIC Stake, Denies Connection amid Regulatory Scrutiny

Rajesh Exports Chief Slams LIC Stake, Denies Connection amid Regulatory Scrutiny​

Rajesh Exports Chairman Rajesh Mehta has vehemently distanced himself and the company's promoters from Life Insurance Corporation (LIC) regarding its substantial investment in the gold jewellery exporter. He clarified that the insurer accumulated its 10.80 per cent stake entirely through stock market purchases spanning nearly two decades.

In an interview with PTI, Mehta asserted that LIC’s investment decisions were made autonomously and without any input or involvement from the company management or its promoters. "We don't even know where LIC's office is. We have no contact, no connection," he stated, emphasizing the lack of relationship between the two entities.

Promoter Denial Over Independent Stake Acquisition​

Mehta clarified that neither the company nor its promoters made any placement to LIC during this period. He confirmed, "No promoter has ever sold his shares to LIC. By the buying of shares by LIC, the company or the promoters have never benefited in any manner." The chairman stressed that LIC's procurement of shares through the secondary market was solely their own commercial decision.

The stock price of Rajesh Exports Ltd has seen a significant downturn, having fallen more than 14 per cent since June 3. On Monday, the share hit a fresh lower circuit limit of Rs 94.50. Despite this decline, Mehta maintained an optimistic view regarding LIC’s long-term investment portfolio.

Evaluating LIC's Gains Amid Declining Stock Value​

Rajesh Mehta expressed the belief that LIC may still be sitting on gains from its prolonged investment in the company. He argued that even at current or lower rates, his understanding suggests that LIC has not incurred a loss. "I believe this accumulated price still supports," he stated regarding the stock’s value.

Mehta further contended that regardless of any potential losses sustained by LIC, the retail investors who sold shares to the insurer over these years stand to benefit. He pointed out, "If somebody loses, somebody has to gain. Who is the counterpart who has gained? It is the common Indian public."

Retail Investor Benefit vs Corporate Interest​

The CEO highlighted that the common Indian public, not the company or its promoters, is the true beneficiary of this transaction. "They have taken the shares from the common Indian public, who have benefited," he stated emphatically. He challenged critics, asking whether anyone was speaking against the benefit accruing to the general populace.

Mehta dismissed concerns regarding a potential exit by LIC, stating that such a move would merely create an opportunity for retail investors. "If they are able to sell, let them sell. Let the public buy back," he advised. He reaffirmed his view that the public, and not the company or its promoters, has been the primary beneficiary.

LIC, India's largest institutional investor, has yet to provide any commentary regarding its investment in Rajesh Exports or its future plans concerning the stock holding.