By Admin 
- SEBI action: Rajesh Exports shares fell 5%.
- Revenue of ₹15.15 lakh crore was found to be fake.
- The company created fake companies and sent money to the promoter.
- Investors’ concerns increased, the company’s shares fell by 90%.
Rajesh Export Shares: Market regulator SEBI has taken strong action against Rojash Export, a company involved in the gold and jewelery business, and its promoter Rajesh Mehta. Due to this, the company’s shares reached the lower circuit of 5% on Thursday, June 4.
This share fell from Rs 103.92 to Rs 104.65 on BSE and NSE. This fall in the company’s shares came at a time when SEBI accused the company’s promoter and chairman Rajesh Mehta of serious financial irregularities and banned his trading in the stock market.
What is the allegation?
According to SEBI’s interim order, the company overestimated its consolidated revenue by about Rs 15.35 lakh crore between the financial years 2021 and 2025. Out of this, revenue of Rs 15.15 lakh crore i.e. about 98.7% was found to be completely fake. The actual revenue was Rs 20111 crore. Many other serious things have come to light in SEBI’s investigation.
Fake companies were created on company papers. Rajesh Exports itself purchased the goods and sold the goods to Khul. Due to this, he went around and inflated the revenue by selling goods to his own companies. The company recorded sales of about Rs 11,487 crore and purchases of about Rs 11,488 crore with a unit called ‘Affluence’ in its standalone books between FY22 to FY24. This was a huge part of the company’s total turnover.
When SEBI investigated, ‘Affluence’ clearly stated that Rajesh Exports was never its customer and there was no transaction with them at the corporate level. ‘Affluence’ revealed that her dealings were only with Rajesh Mehta on a personal level. The investigation found that the company’s money was transferred to the promoter’s personal bank accounts without the approval of the board and audit committee and rules were violated.
According to the rules of the stock market, the money of a public listed company belongs to the shareholders. Promoters cannot route company cash into their private accounts like short or long term loans without proper disclosures and approvals. Such ‘out-and-out transactions’ are often used to conceal financial fraud.
How was it revealed?
In March 2024, SEBI had started its investigation against the company on the basis of a complaint received from a shareholder. The shareholder had mainly raised the issue in the complaint that a huge amount was seen stuck in the books of Rajesh Exports in the form of ‘Trade Receivables’ for years.
When SEBI scrutinized the initial data of the company on the basis of this complaint, it found some irregularities. The company was continuously claiming its turnover was high, but its cash flow and bank balance were not matching with it. SEBI formed an investigation team for investigation. Then an auditor was also appointed for forensic audit of the case.
Impact on stock market and investors
After these allegations made by SEBI, investors’ concerns about the future of Rajesh Exports have increased. The country’s largest insurance company, Life Insurance Corporation of India (LIC), also has a stake in it. LIC has up to 10.8% stake in the company by March 2026. This has dealt a big blow to institutional investors. This stock has fallen by almost 90% from its all-time high.