Rajesh Exports has issued a clarification saying that the revenues stated by the company in its financials are correct. The statement comes after the Securities and Exchange Board of India (SEBI) passed an interim order against the company noting that 97% to 99% of the revenue of the company is inflated.
“The Company emphatically states that it has done no wrong and all the reporting of the Company with regard to its financials has been correct,” noted Rajesh exports in its exchange filing.
The company said that the order passed by SEBI is an interim order in which no conclusive adverse findings of any kind have been reported.
“There has been no fine, penalty or any other coercive action by SEBI against the Company which clearly establishes that there are no any adverse conclusive findings by SEBI,” the company added.
In March 2024, SEBI received a complaint from a shareholder of Rajesh Exports, in which allegations were made regarding potential financial misrepresentation in the books of the company with respect to large sum of trade receivables outstanding for more than two years.
SEBI in its order highlighted non cooperation by the company during investigation, non disclosure of material consolidated financial information and non-availability of financial statements of the Rajesh Export’s subsidiaries/ step-down subsidiaries
“The investigation has revealed a pattern of routing corporate funds through personal accounts, misutilization of funds to promoter-controlled entities, and obscuring fund trails. There is a credible and real risk that, without immediate restraint, assets of REL may be alienated or dissipated by the Noticees, thereby frustrating any future recovery, disgorgement, or enforcement action. The cross-holdings between Elest and ACC Energy Storage, which remain under investigation, create further complexity that may be exploited to move assets beyond reach,” SEBI noted in its interim order in the matter of Rajesh Exports.”The core observation in the order is with regard to the mis-reporting of the revenues, this has emerged primarily due to confusion because SEBI has considered the EBIDTA of Valcambi instead of Revenue hence it has stated that the there is difference of about 97% in the revenue,” said the company. The company clarified that the consolidated Revenue is correct.
Rajesh Exports said that the entire matter is a result of confusion and communication gap, and that the company is in the process of addressing the same with SEBI
“The Company is confident that it will be able to clarify the matter with SEBI by presenting all the required and relevant documents,” said Rajesh exports. “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.”
