The Securities and Exchange Board of India (SEBI) has issued an against Rajesh Exports and owner Rajesh Mehta, who have been found liable for misleading and defrauding investors of more than INR1 trillion (USD10.46 billion).
The SEBI observed violations of the Companies Act 2013, Indian accounting standards, regulations for contracts, listing and disclosure, as well as anti-fraud and unfair trade practices.
Rajesh Exports and Mehta were found to have withheld access to financial information from investors, falsely recording sales, purchases, revenue, interests from mutual funds and deposits and other statements, inflating and misleading operations and revenues, and hampering SEBI’s investigations, among other allegations.
The SEBI issued the order based on an investigation into Rajesh Exports from 1 April 2020 to 31 March 2024 for financial misrepresentation in the company books.
Rajesh Exports is involved in the import, sale, refining and manufacturing of gold. The investigations revealed a multi-layered corporate structure in India, Singapore, the US and UAE. Rajesh Exports’ accounts revealed that overseas operations contributed significantly to the financial standing of the company.
Data from overseas operations was not disclosed as statutorily required, but were not maintained properly, violating maintenance and disclosure requirements for company accounts.
The unco-operative and misleading approach of the company, Mehta and the excessive inflation of financial data led the SEBI to issue an interim order to protect investors and market integrity. The SEBI ordered that the accused co-operate with investigations, restricting them from trading company shares and directed them to fulfill disclosure requirements.
This ex parte order means Rajesh Exports and Mehta will have an opportunity to challenge the SEBI’s findings at a hearing.
