Rajesh Exports rejects inflated revenue, LIC share placement allegation; terms it 'speculative'

Rajesh Exports

on Friday, June 5, rejected allegations of inflated revenues and share placement to state-owned LIC, terming them ”speculative inferences” and asserting it is in the process of mitigating concerns raised by SEBI.

In a regulatory filing, the Bengaluru-based gold jewellery maker reiterated that SEBI’s interim order has only raised ”suspicions on certain aspects” and there are ”no conclusive adverse findings” on any of the company matters.

On June 3, the Securities and Exchange Board of India (SEBI) barred Rajesh Exports promoter and CEO Rajesh Mehta from dealing in the company’s securities, alleging large-scale misrepresentation of financial statements and diversion of funds.

In a 109-page interim order, the regulator found Rajesh Exports allegedly inflated its consolidated revenues by more than ₹15 lakh crore over five years by attributing massive revenues to overseas subsidiaries, particularly Valcambi SA, despite the subsidiary’s audited standalone financial statements showing only a fraction of those amounts. ”The major point misinterpreted with regard to the revenues of the company is totally misplaced,” the company said, adding that the huge revenues reported in the consolidated financials are primarily from Switzerland-based Valcambi.

It is a globally accepted fact that Valcambi, wholly-owned subsidiary of Rajesh Exports, is the world’s largest, finest and most reputed gold refinery. It is engaged in the sale of gold bullion to major banks, central banks and other large bullion entities across the world, it added.

Rajesh Exports further noted that ”some of the media reports and social media postings with regard to scam, fraud, inflated revenues, placement of shares to LIC are totally incorrect, out of place and speculative”.

”The company outright rejects all these speculative inferences.” LIC has gradually increased its stake in Rajesh Exports and currently holds nearly 11% in the jewellery maker, according to shareholding data on the BSE.

Seizing on SEBI’s order, the Opposition Congress had on Thursday attacked the Modi government for a ”gigantic scam” and asked if the LIC’s substantial stake in Rajesh Exports was driven by instructions from the ruling ecosystem.

Shiv Sena UBT leader Priyanka Chaturvedi had also questioned the company’s business model and its foray into EV batteries and getting a 5 GWh manufacturing capacity awarded by the government under the PLI scheme.

Stating that the company was engaged in ”transparent and absolutely straightforward operations”, Rajesh Exports said neither it nor any of its personnel is involved in ”any wrongdoings or misrepresentations”.

It has never indulged in any ”mis-reporting and all its filings, financial numbers, including revenue, are true and genuine”.

The company said it was in the process of mitigating each one of the concerns raised in market regulator SEBI’s interim order with explanation, documents and solid evidence.

”The company is confident that SEBI will appreciate the submissions of the company and clear all the suspicions raised in the interim order,” it added.

According to Rajesh Exports, the company is a totally debt-free firm and not dependent on any outside finance for any of its operations.

It has never raised any money from any public offerings except for the initial public issue, raising only ₹10 crore from the public in 1995. The company has never made any equity placement to any of the domestic institutions.