Markets regulator Sebi on Wednesday confirmed its interim directions against Rajesh Exports Ltd and chairman Rajesh Mehta over alleged financial misrepresentation and suspected fund misuse, directing the company to ensure accurate disclosures and retaining restrictions on Mehta's dealings in its securities.
In its 77-page confirmatory order, the Securities and Exchange Board of India (Sebi) also directed the company and Mehta to continue cooperating with the ongoing investigation and provide all documents, information and explanations sought by the regulator.
The regulator also directed the newly appointed forensic auditor to complete its work expeditiously and asked the investigating authority to conclude the investigation at the earliest.
The noticees have been directed to provide the documents, information and explanations sought by the investigating authority within the stipulated timelines.
The order follows an ex-parte interim order passed by Sebi on June 3, 2026, after its examination raised concerns over the company's financial disclosures, consolidation of accounts and failure to furnish complete information sought by the regulator and the forensic auditor.
Sebi's examination covered the period from April 2020 to March 2024, following a complaint alleging that substantial trade receivables had remained outstanding for more than two years.
The regulator noted that the company had failed to furnish the financial statements of its subsidiaries and step-down subsidiaries, despite statutory requirements. It also did not provide the requisite party-wise details of sales, purchases, debtors, creditors and inventory, citing confidentiality agreements and restrictions under Swiss law.
Sebi further observed that Rajesh Exports had reported substantially higher consolidated revenues by including revenues attributable to its overseas subsidiaries and step-down subsidiaries, while inconsistencies were found in the consolidation of accounts.
The regulator had appointed BDO India Services Pvt Ltd as forensic auditor on December 3, 2024.
However, Sebi said the company and the other noticee had submitted incomplete information despite being given sufficient time and had failed to cooperate with the forensic auditor, hampering the completion of the forensic audit report and the investigation.
The confirmatory order examines several issues, including alleged misrepresentation in standalone and consolidated financial statements, incorrect consolidation of accounts, claims relating to investments in gold mines in Africa, adjustment of trade receivables against trade payables and alleged misuse of funds.
Sebi observed that the noticees had failed to rebut the prima facie findings recorded in the interim order.
Reiterating the restrictions, Sebi directed that Mehta "shall continue to be restrained from buying, selling or otherwise dealing, directly or indirectly, in the securities of Rajesh Exports Ltd, in any manner whatsoever, until further orders".
The company was directed to continue making true, fair, accurate and complete disclosures of its financial statements, related-party transactions and other material information in accordance with applicable laws.
Rajesh Exports is listed on the BSE and the National Stock Exchange. The company sells gold products in domestic and overseas markets and operates retail showrooms under the Shubh Jewellers brand.
(Except for the headline, Fortune India has not edited the content of this PTI report.)