'Confusion and communication gap': Rajesh Exports shares in focus after NSE, BSE clarification on SEBI order

Shares of Rajesh Exports Ltd are in focus after the company informed NSE and BSE that the core observation in the recent SEBI order with regard to the mis-reporting of the revenues emerged primarily due to confusion because SEBI has considered the Ebitda of Valcambi instead of revenue. In an exchange filing, Rajesh Exports stated that the there is difference of about 97 per cent in the revenue. "The consolidated revenue as stated by the company is correct," Rajesh Exports informed exchanges.

Rajesh Exports said the entire matter is a result of confusion and communication gap, which the company is in the process of addressing with SEBI and is confident that it will be able to clarify the matter with SEBI by presenting all the required and relevant documents. 

Rajesh Exports insisted that SEBI has not made adverse observation with regard to its earnings and that it has only observed suspicion with regard to revenues which is primarily because of confusion with regard to the revenues of Valcambi.

As a result, it alleged that Rajesh Exports misrepresented approximately Rs 15.15 lakh crore, accounting for 99.80 per cent of the revenues generated by its subsidiaries between FY21 and FY25.

"There is no reason for any listed entity to inflate revenue and maintain the earnings, this will only reduce the margins of the company, which would be adverse to the company," Rajesh Exports said.

Rajesh Exports shares fell 5 per cent to settle at Rs 103.92 per share on Thursday.

In a seven-pointer clarification, Rajesh Exports said there has been no fine, penalty or any other coercive action by SEBI against the company, which clearly establishes that there are any adverse conclusive findings by SEBI.

"The company emphatically states that it has done no wrong and all the reporting of the Company with regard to it's financials has been correct," Rajesh Exports said as it felt "there have been several speculative reports with regard to the order in the media."

In a separate note, Rajesh Exports said it is in the process of clarifying all aspects to SEBI by submitting all the required and relevant documents.

"The company is confident that SEBI in its wisdom will clarify the situation and arrive at the correct conclusion based on the authenticated documents which are in the process of submission by the company. The company rejects all adverse media reports appearing with regard to the interim order of SEBI," Rajesh Exports said. 

As per SEBI's interim order, the company allegedly misrepresented nearly its entire revenue over a five-year period and diverted company funds without the required approvals and disclosures.

SEBI, for now, has barred Rajesh Exports and its promoter Rajesh Mehta from accessing the securities market until the completion of its investigation. According to Sebi, around 97–99 per cent of Rajesh Exports' consolidated revenue originated from its overseas subsidiaries, particularly Switzerland-based Valcambi SA. However, the company allegedly failed to disclose the financial statements of its subsidiaries in the public domain on a consistent basis, SEBI said.

IT said Valcambi SA was presented as the group's principal operating entity, but its audited standalone financial statements reflected negligible revenues.