Rajesh Exports Stock Plunges Over 26% as SEBI Allegations Hit Company with Crisis Spiral

Rajesh Exports Stock Plunges Over 26% as SEBI Allegations Hit Company with Crisis Spiral​

The stock performance of crisis-hit Rajesh Exports continues to deteriorate amidst mounting pressure from regulatory scrutiny. Shares of the Bengaluru-headquartered gold refiner have fallen sharply since market regulator SEBI issued an interim order on June 3, reflecting deep investor concern over corporate governance and financial reporting practices.

Rajesh Exports shares closed trading in a lower circuit after suffering significant declines throughout the week. The stock hit the 5 percent lower limit for the sixth consecutive session, highlighting the severity of the ongoing regulatory challenge.

Collapse Continues as Shares Hit Lower Circuit​

The relentless slide has seen Rajesh Exports shares plummet from Rs 109.99 apiece on June 3 to Rs 80.43. This marks a severe decline amounting to 26.88 percent over the period since the SEBI action was taken. The stock being locked at Rs 80.43 on the NSE in Thursday's trade underscore the ongoing volatility and risk faced by the company.

Regulatory Focus: SEBI Alleges Revenue Inflation​

The core of the current turmoil stems from the interim order issued by SEBI on June 3. The regulator alleged that Rajesh Exports had significantly overstated its revenue over a five-year period. Specifically, the allegation pointed to an inflation of approximately Rs 15.15 lakh crore spanning FY21 and FY25.

SEBI's concerns were centered around revenues attributed to overseas subsidiaries. The regulator noted that the inflated figures stemmed from reporting massive income derived from these international entities, particularly Switzerland-based Valcambi SA. SEBI further expressed alarm over a prima facie misrepresentation of the company’s financial standing.

CEO Responds: Founder States Cooperation With Regulator​

In response to the regulatory actions, founder and CEO Rajesh Mehta addressed the allegations in a statement on Wednesday. Mr. Mehta confirmed that he would not contest SEBI's interim order and stated the company is already cooperating fully with the regulator.

While rejecting claims of obstruction, Mehta maintained that Rajesh Exports had provided everything requested throughout the audit process. He emphasized his commitment to transparency, stating, "I would never agree to the fact that certain relevant documents have not been submitted by us." The CEO concluded that all discrepancies would be reconciled now.