Shares of Rajesh Exports hit the 5% lower circuit on Thursday, June 4, after the Securities and Exchange Board of India (SEBI) initiated an investigation into the company and its Executive Chairman Rajesh Mehta over alleged financial misrepresentation and disclosure-related violations.
The stock fell to Rs 103.92, down 4.99%, after the market reacted to SEBI's interim order, which alleged that the company may have misrepresented financial statements involving transactions aggregating around Rs 15 lakh crore during FY21 to FY25. According to the regulator, the amount represented nearly 99.8% of the company’s consolidated revenue reported during the period.
SEBI has also restrained Executive Chairman Rajesh Mehta from dealing in the company’s securities until further orders. The regulator cited multiple alleged violations, including non-disclosure of material financial information, unavailability of subsidiary financial statements, misrepresentation in annual reports, a false claim regarding investment in a gold mine in Africa, and lack of cooperation during the investigation.
According to the interim order, SEBI's preliminary findings indicated that derivatives transactions undertaken by Rajesh Mehta were allegedly recorded in the company’s books as corporate transactions. The regulator also alleged incorrect accounting treatment of foreign exchange fluctuations and raised concerns regarding adjustments made to long-outstanding trade receivables.
SEBI further stated that Rajesh Exports did not provide complete access to financial records and information related to overseas subsidiaries, which allegedly hampered the investigation process.
The regulator observed that the company's conduct prima facie indicated a pattern of financial misrepresentation, concealment and regulatory non-compliance across multiple financial years. SEBI added that investors may have been presented with an inflated picture of the company's operational scale and financial position.
The sharp fall in the stock reflects investor concerns over the regulatory action and the potential implications of the ongoing investigation. Despite closing nearly 3% higher in the previous session, Rajesh Exports shares have declined more than 38% in 2026 so far and have lost nearly 80% of their value over the last five years.
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