Mumbai, June 8: Tuhin Kant Pandey, the Chairman of the Securities and Exchange Board of India (SEBI), refrained from commenting on the regulatory actions against Rajesh Exports. He stated that the case is part of a quasi-judicial process and should be resolved within the legal framework.
During a press interaction at the India Investor Conference in Mumbai, Pandey emphasized, “In principle, we do not comment on individual cases in the media. This is a quasi-judicial process where orders are issued that must be followed, or they can be challenged as per the legal process. Therefore, I will not comment on this matter.”
Speaking about upcoming regulations for bond brokers and the tokenization initiative, the SEBI chief noted that the completion of the regulator’s tokenization pilot program may take an additional six to nine months.
Pandey’s remarks come shortly after SEBI barred Rajesh Mehta, the promoter and CEO of Rajesh Exports, from trading the company’s shares. SEBI has accused him of financial irregularities, fund diversion, and failing to provide adequate information regarding transactions with related parties.
Following SEBI’s actions, Rajesh Exports’ shares have been under pressure. On Monday, the company’s stock fell by 5% on the BSE, reaching a lower circuit limit of ₹94.50.
Last week, the company’s shares had also closed at the lower circuit for two consecutive trading sessions following SEBI’s interim order.
Preliminary findings from SEBI’s interim investigation indicated that funds associated with the company were funneled through personal accounts and related entities. Sufficient information and documentation regarding these transactions were reportedly not provided.
The regulator stated that the company was given multiple opportunities to present accurate financial details and information about the final use of funds and beneficiaries, but the responses were unsatisfactory.
SEBI also alleged that the company’s statutory auditors did not fully cooperate during the investigation. According to the regulator, despite assurances, working papers related to the audit were not made available.
SEBI suggested that the ongoing lack of cooperation may indicate an attempt to conceal crucial information and obstruct the investigation.
In its observations, the market regulator noted that approximately 97% to 99% of the company’s revenue appeared to be inflated. SEBI described these alleged irregularities as “serious and unprecedented.”
The interim order stated that Rajesh Mehta had significant control over the company’s financial operations. Consequently, he has been prohibited from buying, selling, or engaging in any transactions involving the company’s shares until further notice.
Meanwhile, Rajesh Exports has dismissed SEBI’s allegations, asserting that no financial irregularities have occurred within the company.
In a statement to the stock exchange, the company maintained that its revenue figures are accurate. It also suggested that there may be some misunderstandings in communication between itself and the regulator.
The company expressed confidence that certified documents would substantiate its position and address all allegations.
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