Rajesh Exports Share Lower CircuitImage Credit source: Magnific/Rajesh Exports
The decline in the shares of Rajesh Exports is showing no sign of stopping. On Monday also the company’s shares fell by 5 percent to Rs 93.80. At this price the stock hit lower circuit. This is the third consecutive trading session when the stock has hit the circuit. If we look at the last seven trading sessions, this stock has lost investors’ capital for six days. A major reason behind this heavy selling is also the news related to the Ministry of Heavy Industries (MHI), in which it has been claimed that the government may soon exclude this company from the PLI scheme of Advanced Chemistry Cell (ACC) battery storage. A final decision on this can be taken in the coming few days.
Allegation of scam worth Rs 15 lakh crore
The root of this entire controversy is the interim order of market regulator SEBI, which was issued last week. In this order, this Bengaluru based company has been accused of large scale financial fraud. SEBI claims that Rajesh Exports has inflated its earnings (revenue) by Rs 15.15 lakh crore between financial years 2021 and 2025. The allegation of misappropriation of such a huge amount has shocked even the market leaders. After this news, investors started indiscriminate selling of the company’s shares.
The regulator made a mistake in accounting
On one hand, SEBI’s allegations are very serious, on the other hand, the argument of the company’s promoter Rajesh Mehta is quite surprising. He says that he had handed over 300 to 400 GB of data to SEBI for investigation, which contained lakhs of pages. Mehta claims that perhaps the regulator could not find the correct documents given by him. They also argue that SEBI has mistakenly considered the company’s ‘EBITDA’ (earnings before tax and interest) as total revenue. According to him, this entire controversy is just a result of a basic accounting mistake.
SEBI Chairman’s tough stance
When SEBI Chairman Tuhin Kanta Pandey was asked on this heated issue during the ICICI Securities India Investor Conference, he replied in a very measured manner. He clarified that in principle SEBI does not comment directly on the matter of any particular company. However, he gave a clear message, saying, “This is a judicial process in which orders are issued. Companies will have to follow these orders at all costs while staying within the ambit of the law.”
Apart from this, from the same platform, Pandey also mentioned his future plans for the Indian capital market. To win the trust of foreign investors (FPIs), he stressed on important steps like simplifying the registration process, coordinating with the Reserve Bank and making the functioning of mutual fund houses more transparent, so that the Indian market can be made more attractive for investment.
