Rajesh Exports Pledges Full Cooperation as SEBI Interrogates ₹15.15 Lakh Crore Revenue Inflation Allegations

Rajesh Exports Pledges Full Cooperation as SEBI Interrogates ₹15.15 Lakh Crore Revenue Inflation Allegations​

Bengaluru-based gold jewellery firm, Rajesh Exports Ltd (REL), has stated it will fully cooperate with the fresh forensic audit ordered by market watchdog SEBI. The company confirmed it will not challenge the interim order issued by the regulator regarding suspected revenue inflation over a five-year period. REL maintains that it has been completely forthcoming throughout the investigation process and denies any obstruction of the ongoing audit.

##Allegations of Revenue Inflation Surface Against Rajesh Exports

SEBI has initiated scrutiny into REL, alleging that the company inflated its consolidated revenues by up to ₹15.15 lakh crore across the financial years spanning 2020-21 to 2024-25. The regulator’s interim order highlights serious concerns over a prima facie misrepresentation of the company's financial standing.

The SEBI findings suggest that substantial revenues were attributed to overseas subsidiaries, particularly Valcambi SA in Switzerland. This attribution was noted despite the subsidiary having audited standalone financial statements showing significantly smaller amounts. The regulator specifically flagged the fact that almost all of REL’s reported revenue was linked to these foreign entities whose financial accounts were not publicly available.

##Rajesh Mehta Denies Obstruction Vows Full Cooperation with Forensic Audit

Company founder and chairman, Rajesh Mehta, addressed the allegations in an interview with PTI. He strongly denied the claims that REL had impeded the audit process, asserting that the company provided everything requested by investigators. "I would never agree to the fact that certain relevant documents have not been submitted by us," he stated, adding that all requirements had been met.

Mehta suggested that the data volume itself contributed to the difficulties flagged by SEBI. The company maintains it possesses around 400 GB of corporate data, indicating that difficult document location rather than withholding was the issue. REL has reportedly begun furnishing documents sought under the interim order and expects to conclude this task within five to six days.

Regarding concerns over access to systems, Mehta pushed back on the allegation that the company denied forensic auditors access. He stated that auditors were provided a dedicated space in the company's offices for more than two months and received all requested materials. "Can they show even one email in writing which says that we have not given them something?" he questioned.

##Company Firmly States It Will Not Challenge Interim SEBI Order

On the possibility of legal resistance, Mehta confirmed there was no reason to challenge SEBI's directions at this juncture. He stated that since there is no immediate penalty or coercive action attached to the interim order, challenging it held little merit. REL also clarified that the trading restriction mentioned in the order applied only to an individual and not the company itself.

Mehta noted that of several thousand clarifications sought by SEBI over the past two-and-a-half years, only nine remain unresolved to the regulator's satisfaction. The revenue inflation query is one among these nine points. While acknowledging SEBI found elements suspicious, he stressed that "Sebi has not made any allegations."

The chairman expressed confidence regarding the final outcome, stating that once all documents and explanations are provided, there would be no adverse action in the final order. However, Mehta added a caveat, warning that if an irrational final order is passed by SEBI, the company will certainly challenge it.