Mumbai, June 4, 2026
Shares of Rajesh Exports plunged 5 per cent and hit the lower circuit on Thursday after the Securities and Exchange Board of India (SEBI) issued an interim order against the company and its promoter Rajesh Mehta, alleging extensive financial irregularities, lack of cooperation during the investigation and possible overstatement of revenues.
The stock touched a lower circuit at Rs 104.65 — a decline of 4.99 per cent from the previous close — on the BSE after SEBI flagged prima facie evidence suggesting that nearly 97-99 per cent of the company’s reported revenue may have been inflated.
“The aberrations prima facie noted in the matter, where approximately 97 per cent to 99 per cent of the revenue of the company is inflated, are egregious and unheard of,” the order said.
Describing the preliminary findings as egregious and unheard of, SEBI Whole-Time Member Kamlesh Chandra Varshney said urgent regulatory intervention was necessary to protect investors and preserve market integrity.
In addition, the market regulator barred promoter Rajesh Mehta from buying, selling or otherwise dealing in securities of Rajesh Exports.
However, it directed the company to fully cooperate with investigators and ensure true and fair disclosure of financial statements and related-party transactions.
The matter stems from a shareholder complaint received in March 2024, which raised concerns over substantial trade receivables reported in the company’s books.
Following an initial review, SEBI launched an investigation covering the period from April 2020 to March 2024 and appointed BDO India Services as the forensic auditor.
According to the order, Rajesh Exports repeatedly failed to provide access to key accounting systems, financial records and supporting documentation sought during the investigation, limiting the forensic auditor’s ability to independently verify a significant portion of transactions.
Only a limited number of sampled transactions could be fully supported with necessary records, while the inability to access underlying accounting data materially restricted verification of several reported financial figures, according to SEBI.
Moreover, the regulator reviewed financial reporting at multiple overseas subsidiaries and step-down subsidiaries, including entities in Singapore and Switzerland.
It further alleged that funds may have been routed through structures that obscured their source and final destination, raising concerns over the credibility of the company’s financial disclosures.
“The aberrations prima facie noted in the matter, where approximately 97 per cent to 99 per cent of the revenue of the company is inflated, are egregious and unheard of,” the order said.
The market watchdog directed Rajesh Exports to submit all pending information sought by investigators within 30 days and ordered the appointment of a new forensic auditor for a more comprehensive examination of the company’s books and transactions.
The regulatory action also weighed on LIC shares, which declined around 1 per cent during trade. The insurer holds nearly a 10 per cent stake in Rajesh Exports.(Agency)
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