Shares of slumped 5 per cent on Thursday to hit the lower circuit at ₹103.92 after barred promoter and Executive Chairman Rajesh Mehta from dealing in the company’s securities over alleged large-scale financial misrepresentation and diversion of funds.
that Rajesh Exports had prima facie misrepresented nearly ₹15.15 lakh crore in revenues linked to its subsidiaries between FY21 and FY25. The regulator said the alleged misstatement accounted for around 99.8 per cent of the revenues attributed to the company’s overseas subsidiaries and step-down subsidiaries, resulting in what it called an “inflated and misleading picture” of operations.
SEBI noted that 97 per cent to 99 per cent of Rajesh Exports’ consolidated revenue originated from overseas subsidiaries, especially Switzerland-based Valcambi SA. However, the company allegedly failed to disclose subsidiary financial statements in the public domain despite projecting Valcambi as its principal operating entity. The regulator observed that Valcambi reported negligible standalone revenue in its audited accounts (amounting to ₹12,557 crore during FY21-FY24).
The order also highlighted alleged fictitious transactions involving Affluence Shares and Stocks Private Limited. Rajesh Exports recorded sales worth ₹11,487 crore and purchases worth ₹11,488 crore with the entity, although Affluence reportedly denied carrying out such trades. SEBI alleged that these were non-genuine entries linked to Rajesh Mehta’s personal derivative positions and were used to artificially inflate turnover.
Further, the regulator alleged that company funds amounting to ₹339 crore were routed to Mehta’s personal accounts, including for derivative trading activities, without board or audit committee approval. In total, ₹926 crore was allegedly routed without proper approvals or related-party disclosures.
SEBI estimated that the alleged misrepresentation and diversion of funds resulted in shareholder wealth erosion of around ₹12,726 crore, including losses suffered by retail investors.
The sharp selloff in the stock reflected investor concerns over corporate governance standards, transparency in financial reporting and the possibility of deeper regulatory scrutiny into the company’s overseas operations and accounting practices.