The Securities and Exchange Board of India has barred Rajesh Mehta from dealing in shares of Rajesh Exports after the regulator flagged alleged financial irregularities at the company.
In its 109-page interim order, SEBI said its initial investigation found signs that Rajesh Exports exaggerated nearly all of its reported sales, with around 97-99% of its revenue potentially being inflated.
"The aberrations prima facie noted in the matter, where approximately 97% to 99% of the revenue of the company is inflated, are egregious and unheard of," the order stated.
Who's Rajesh Mehta?
Rajesh J Mehta, 60, is the founder and chairperson of Rajesh Exports and is based in Bengaluru. He started the company in 1989 and transformed it into one of the world's largest gold refining and export businesses.
He started his career in the precious metals business at a young age after leaving college and initially traded silver before moving into the jewellery business.
Rajesh Exports buys raw gold, refines it into pure gold, manufactures jewellery, and sells gold products. A major milestone came in 2015 when Rajesh Exports acquired Valcambi, a Switzerland-based refinery considered one of the world's largest gold refining facilities.
The company generates annual revenue of about $39.2 billion (approx. Rs 3.75 lakh crore), while reporting a net income of $153.2 million (approx Rs 1,465 crore). Rajesh Exports is currently valued at around Rs 9,829 crore on the stock market.
After SEBI's interim order against Rajesh Exports and its promoter Rajesh Mehta, shares of LIC dropped by around 1%. The insurer owns a 10.8% stake in Rajesh Exports.
Investors state that the allegations of revenue discrepancies worth Rs 15.15 lakh crore could hurt Rajesh Exports' share price and reduce the value of LIC's investment in the company.
ALSO READ: Rajesh Exports' Shares Hit Lower Circuit After SEBI Probe Into Rs 15.15 Lakh Crore Revenue Mismatch
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