Rajesh Exports Ltd. will fully cooperate with a new forensic audit ordered by Sebi and will not challenge the interim order. The company's founder, Rajesh Mehta, denied allegations of impeding the audit and stated that all requested documents have been submitted.
The company's cooperation with the forensic audit and decision not to challenge the interim order are crucial for resolving Sebi's allegations of significant revenue inflation, which could impact investor confidence and the company's financial standing.
Bengaluru-based gold jewellery firm Rajesh Exports Ltd. (REL) has stated it will fully cooperate with a fresh forensic audit ordered by the Securities and Exchange Board of India (Sebi) and will not challenge the market regulator's interim order. Sebi is investigating suspected revenue inflation amounting to Rs 15.15 lakh crore over a five-year period, primarily by attributing massive revenues to overseas subsidiaries, particularly Switzerland-based Valcambi SA.
Rajesh Mehta, founder and chairman of REL, denied allegations that the company had impeded the audit process, asserting that all requested documents have been submitted. He attributed any perceived gaps to the sheer volume of data handled by the company, suggesting that certain documents may have been difficult to locate rather than deliberately withheld. Mehta indicated that the company has already begun furnishing documents sought under the interim order and expects to complete this within five to six days.
Sebi's interim order raised concerns over a prima facie misrepresentation of the company's financial position, noting that a significant portion of REL's reported revenues were attributed to overseas subsidiaries whose financial statements were not publicly available. Mehta countered that auditors had dedicated space in the company's offices for over two months and were provided all requested material. He stated that the company does not plan to legally contest Sebi's directions, as the current order does not impose fines or penalties, and expressed confidence that the final order would be favorable once all explanations are provided.