Gold jewelry and refining major Rajesh Exports Limited (REL) has strongly rejected allegations of financial misrepresentation stemming from a recent SEBI interim order. In a fresh clarification filed with the NSE and BSE, the company asserted that its reported consolidated revenues are entirely accurate and genuine.
The company claims that the capital market regulator’s adverse observations are the result of a massive “communication gap” and confusion regarding the financial metrics of its Swiss subsidiary, Valcambi SA.
The Core of the Discrepancy: Revenue vs. EBITDA
According to Rajesh Exports, the apparent 97% mismatch flagged by SEBI occurred because the regulator mistakenly reviewed Valcambi SA’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) instead of its actual gross revenue.
The company noted that it has no logical reason to artificially inflate its revenue numbers. Doing so while keeping actual earnings constant would only compress its profit margins, which would inherently hurt the company’s market standing.
Key Points from the Company’s Clarification
-
No Fines or Penalties: Rajesh Exports emphasized that SEBI has not issued any fines, penalties, or conclusive adverse findings, characterizing the current situation as an ongoing review rather than a final judgment.
-
Document Submission: The management is in the process of submitting authenticated financial and accounting documents to SEBI to clear up the misunderstanding.
-
Rejection of Speculation: The firm categorically dismissed speculative media reports regarding the scale of the probe, expressing confidence that the regulator will reverse its stance once the proper documents are reviewed.
Context: What Triggered the SEBI Order?
The company’s response follows an interim ex-parte order issued by SEBI on June 3. The regulator had alleged that Rajesh Exports prima facie misrepresented approximately ₹15.15 lakh crore ($158 billion) in subsidiary-linked revenue between FY21 and FY25.
SEBI’s initial probe highlighted that while 97% to 99% of the group’s consolidated revenue was attributed to overseas operations like Valcambi, the standalone audited numbers of the Swiss refiner appeared negligible in comparison—a gap Rajesh Exports now claims is entirely due to the revenue-versus-EBITDA accounting mix-up. Pending the final investigation, SEBI has temporarily barred the company’s promoter and chairman, Rajesh Mehta, from accessing the securities market.
