Rajesh Exports Stock Plummets 5% Following SEBI Ban on CMD for Financial Irregularities

Shares of Rajesh Exports Ltd, a prominent jewellery exporter, fell sharply on Thursday, dropping 5% to hit the lower circuit limit. This decline followed a directive from the Securities and Exchange Board of India (Sebi) that prohibited the company’s promoter and CEO, Rajesh Mehta, from trading in the firm’s securities. The regulator cited significant irregularities in financial reporting and the diversion of company funds as the basis for its actions.

Sebi’s Investigation Findings

On the Bombay Stock Exchange (BSE), Rajesh Exports’ stock fell to Rs 104.65, while on the National Stock Exchange (NSE), it declined to Rs 103.92, both reaching their daily lower limits. Sebi’s interim order, issued on Wednesday, detailed findings from an investigation that revealed apparent misstatements in the company’s financial accounts. The regulator noted that funds were allegedly routed through personal bank accounts and related entities using complex transactions, lacking adequate disclosures.

The order indicated that Rajesh Exports had been repeatedly served notices and given opportunities to provide genuine financial records. However, the responses received were deemed inadequate. Sebi also pointed out a lack of cooperation from the company’s statutory auditors, who failed to submit relevant audit working papers despite assurances during their deposition.

Regulatory Directives

Sebi’s order highlighted serious preliminary irregularities, including an apparent overstatement of nearly 97-99% of the company’s reported revenue. This finding was described as exceptionally serious and atypical. The regulator emphasized that Rajesh Mehta played a central role in decision-making and had significant influence over the company’s operations and financial management.

In light of these findings, Sebi has prohibited Rajesh Mehta from purchasing, selling, or otherwise dealing in Rajesh Exports’ securities, either directly or indirectly, until further notice.

Observer Voice is the one stop site for National, International news, Sports, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.

Follow Us on Twitter, Instagram, Facebook, & LinkedIn