- SEBI flagged Rs 15.15 lakh crore revenue misrepresentation by Rajesh Exports in an interim order
- Nearly 98-99% of Rajesh Exports revenue reportedly came from foreign subsidiaries, raising transparency issues
- Concerns were raised over revenue figures of a Swiss subsidiary and other overseas units' financial reporting
India's capital markets regulator, the Securities and Exchange Board of India (SEBI), has expressed serious reservations about the financial disclosures made by Rajesh Exports, alleging that the company's revenue figures—largely driven by its overseas operations—may have presented a misleading picture to investors. The market regulator has flagged alleged Rs 15.15 lakh crore revenue misrepresentation at Rajesh Exports.
The observations were made in an interim order issued following a shareholder complaint that questioned the authenticity of the company's consolidated financial statements.
According to SEBI, nearly 98% to 99% of Rajesh Exports' reported revenue over several years originated from foreign subsidiaries, prompting scrutiny over the accuracy and transparency of those disclosures.
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The regulator has highlighted significant discrepancies in the financial reporting of certain overseas units, including concerns over revenue figures reported by a Swiss subsidiary.
SEBI said key financial information relating to foreign entities was not adequately disclosed to shareholders, making it difficult for investors to assess the true scale and nature of the group's business operations.
SEBI also noted that efforts to verify the transactions through a forensic audit were hindered by inadequate documentation and an alleged lack of cooperation.
The company reportedly failed to furnish transaction-level records and supporting evidence sought during the investigation, raising further questions about the legitimacy of the reported revenues.
In its order, the regulator pointed to what it described as prima facie violations of disclosure norms, corporate governance requirements and anti-fraud regulations.
The findings have intensified concerns over the reliability of the company's financial reporting and the effectiveness of oversight mechanisms surrounding its overseas subsidiaries,
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The interim order marks a significant development in SEBI's ongoing probe and could have far-reaching implications for investor confidence and regulatory compliance standards in listed companies with extensive international operations.
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