Rajesh Exports shares dropped 5% for the second consecutive day, totaling a 10% decline over two days following a Sebi interim order. The regulator alleges large-scale financial irregularities and potential revenue inflation of 97-99%. The company denies the claims, citing a communication gap and a five-year figure.
The allegations of significant revenue inflation and financial irregularities by India's securities regulator raise serious governance concerns and could lead to further regulatory action and investor scrutiny for Rajesh Exports.
Shares of Rajesh Exports experienced a significant downturn, hitting the 5% lower circuit for the second consecutive trading day on Friday. This two-day decline has resulted in an approximate 10% drop in the company's stock value. The sell-off follows an interim order from the Securities and Exchange Board of India (Sebi), which alleged large-scale financial irregularities within the company. According to Sebi's findings, an investigation and forensic review indicated prima facie evidence suggesting that between 97% and 99% of Rajesh Exports' reported revenue might have been inflated. In response, an official named Mehta stated that the Rs 15.5 lakh crore figure cited by the regulator is a five-year total and denied any overstatement of revenue, attributing the situation to a 'communication gap'. Rajesh Exports has come under intense scrutiny after Sebi accused the company and its promoter of inflating revenues, misclassifying personal transactions as corporate sales and diverting company funds. The regulator's interim findings have raised serious governance concerns, though the company has strongly denied the allegations and defended its financial reporting.
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