Rajesh Exports Row: Experts Push For SFIO Probe, See Fraud Behind 'Glamorous Numbers'

Rajesh Exports has found itself in quandary after the Securities and Exchange Board of India alleged a misrepresentation of Rs 15.15 lakh crore of revenue attributed to overseas subsidiaries between FY21 and FY25. 

The company's Chairman Rajesh Mehta, while talking to NDTV Profit exclusively on Thursday defended the company against SEBI's interim order, arguing that the market regulator may not have checked documents sent by Rajesh Exports due to their "bulkiness".

However, industry experts and lawyers have dismissed arguments made by Mehta, stating that a miscommunication on SEBI's end seems "hard to believe".  Hetal Dalal, President of Investor Advisory Services underscored that the alleged miscalculation by auditors looks "unreal." 

ALSO READ: Rajesh Exports Timeline: Inside SEBI's Rs 15-Lakh-Crore Revenue Case

Vinod Rawal, an auditor, called the incident an attempt to make the numbers look "glamorous", adding that auditors should be held responsible for the gap. 

Supreme Court lawyer Kapil Madan highlighted that such cases can be assigned to Serious Fraud Investigation Office (SFIO) since the issue seems like a fraud. He added that it is a "big issue" if the market regulator's findings are prima facie true. 

The SC lawyer underlined that Rajesh Export's potential remedy to what appears to be a "huge inflation of revenue" would be closely watched. 

ALSO READ: Exclusive: Rajesh Exports Chief Evades Questions Of Irregularities, Refutes SEBI's Allegations

What Did Mehta Say?

In his first detailed interview since the order, Mehta said the headline figure of Rs 15.5 lakh crore cited by the regulator is a five-year figure. He added that there is no overstating of revenue by the company. 

When asked about the specific finding on transactions with Affluence Shares and Stocks Pvt. Ltd., which the regulator said the entity had denied, Rajesh Mehta said the clarification was not seen by SEBI while defending the numbers.

"SEBI has not seen the clarification correctly," Mehta said. "This trade is absolutely correct. It is spread over a period of four years with Affluence. We have shared information with SEBI about the same," he said.

"We have submitted every document with respect to Affluence to SEBI. No personal account was used for trading with Affluence.

"There is no question of misrepresentation. There is no purpose of overstating our revenue. We have explained everything to SEBI, without any doubt," Mehta further clarified. 

Mehta also disputed any suggestion that the company's stated revenue had changed, saying the standalone figure was already included in the consolidated numbers. "The standalone revenue is already included in the consolidated figure," he said.

He also quipped why SEBI may not have checked documents sent by Rajesh Exports. "Maybe they have not checked because of the bulkiness of the documents. We have sent 400 GB of documents," he said. 

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