Rajesh Exports shares hit lower circuit again as SEBI bars promoter Rajesh Mehta
Synopsis
SEBI's interim order against Rajesh Exports alleges that nearly 99.80 per cent of the company's revenues — amounting to ₹15,15,385 crore across FY21–FY25 — were prima facie misrepresented. With promoter-CEO Rajesh Mehta barred from trading and auditors accused of non-cooperation, this is one of the most sweeping financial irregularity cases the regulator has flagged against a listed Indian company in recent memory.
Key Takeaways
Rajesh Exports shares fell 4.99% on the NSE to ₹98.73 and 4.97% on the BSE to ₹99.45 on 5 June , hitting lower circuit for the second straight session.
SEBI issued an interim order barring promoter and CEO Rajesh Mehta from dealing in the company's securities over alleged financial irregularities.
The regulator alleged prima facie misrepresentation of approximately ₹15,15,385 crore , or about 99.80 per cent of revenues attributed to subsidiaries during FY21 to FY25 .
SEBI flagged routing and layering of funds through personal accounts and related entities without adequate disclosures.
The company's statutory auditors were cited for non-cooperation, with audit working papers not provided despite assurances.
Rajesh Exports denied the allegations, stating revenues were correctly reported and attributing the issue to a communication gap with the regulator.
Shares of Rajesh Exports tumbled nearly 5 per cent for the second consecutive session on Friday, 5 June, hitting lower circuit limits after the Securities and Exchange Board of India (SEBI) barred the company's promoter and CEO, Rajesh Mehta, from dealing in the company's securities over alleged financial irregularities. On the National Stock Exchange (NSE), the stock fell 4.99 per cent to ₹98.73, while on the Bombay Stock Exchange (BSE) it dropped 4.97 per cent to ₹99.45.
What SEBI's Interim Order Alleges
The sharp back-to-back selloff followed a SEBI interim order alleging large-scale misrepresentation of financial statements, diversion of funds, and inadequate disclosures relating to related-party transactions and fund flows. According to the regulator's order, its investigation prima facie revealed instances of routing and layering of funds through personal accounts and related entities, without adequate disclosures or supporting documentation.
SEBI stated that repeated summons and opportunities were extended to the company to furnish accurate financial statements and records explaining the end-use, business rationale, and ultimate beneficiaries of fund flows — but the responses remained unsatisfactory.
Revenue Inflation Allegations and Key Numbers
The regulator's findings were particularly stark on the revenue front. SEBI observed that nearly 97–99 per cent of the company's revenue appeared to be inflated, describing the alleged irregularities as 'egregious and unheard of'.
SEBI Whole Time Member Kamlesh Chandra Varshney stated in the interim order: 'I note that REL has prima facie misrepresented approximately ₹15,15,385 crore, representing about 99.80 per cent of revenues attributed to subsidiaries during FY21 to FY25.'
The order further noted that Mehta exercised substantial control over the company's day-to-day affairs and financial operations, and accordingly restrained him from buying, selling, or dealing in the company's securities, directly or indirectly, until further orders.
Auditor Non-Cooperation Flagged
SEBI also flagged non-cooperation by the company's statutory auditors, noting that despite assurances during depositions, audit working papers were not provided. The regulator observed that such sustained non-cooperation indicated possible attempts to suppress material information and obstruct regulatory investigations. This is a significant escalation, as auditor non-cooperation in a SEBI probe is relatively rare and typically signals deeper governance concerns.
Company Denies Allegations
The Bengaluru-based company denied the allegations in an exchange filing, maintaining that its revenues were correctly reported. Rajesh Exports suggested that there appeared to be a communication gap between the company and the regulator, and expressed confidence that SEBI would arrive at the correct conclusion after reviewing authenticated documents.
With the stock now having hit lower circuit limits on two straight sessions and SEBI's investigation ongoing, market participants will be watching closely for any further regulatory action or company disclosures in the days ahead.
Point of View
If upheld, would rank among the most consequential accounting frauds in Indian listed-company history. What is equally notable is the auditor non-cooperation angle: statutory auditors are the last institutional check before investors receive financial statements, and their failure to produce working papers raises questions about the integrity of the entire audit chain. The company's response — attributing the dispute to a 'communication gap' — is conspicuously thin against the specificity of SEBI's findings. Markets are pricing in the worst, and unless Rajesh Exports produces authenticated documentation quickly, the regulatory overhang will persist.
NationPress
21 Jul 2026
Frequently Asked Questions
Why did Rajesh Exports shares hit the lower circuit for two straight days?
Rajesh Exports shares hit lower circuit limits on both Thursday and Friday after SEBI issued an interim order barring promoter and CEO Rajesh Mehta from dealing in the company's securities over alleged large-scale financial irregularities. The stock fell nearly 5 per cent on each day, settling at ₹98.73 on the NSE on 5 June.
What does SEBI's interim order against Rajesh Exports allege?
SEBI's interim order alleges that Rajesh Exports prima facie misrepresented approximately ₹15,15,385 crore — about 99.80 per cent of revenues attributed to subsidiaries — during FY21 to FY25. The regulator also alleged routing and layering of funds through personal accounts and related entities without adequate disclosures.
Who is Rajesh Mehta and what restrictions has SEBI imposed on him?
Rajesh Mehta is the promoter and CEO of Rajesh Exports. SEBI's interim order restrains him from buying, selling, or dealing in the company's securities, directly or indirectly, until further orders, citing his substantial control over the company's day-to-day affairs and financial operations.
What has Rajesh Exports said in response to the SEBI order?
Rajesh Exports denied the allegations in an exchange filing, stating that its revenues were correctly reported. The Bengaluru-based company attributed the situation to a communication gap with the regulator and expressed confidence that SEBI would reach the correct conclusion after reviewing authenticated documents.
Why did SEBI flag the company's statutory auditors?
SEBI noted that despite assurances during depositions, the company's statutory auditors did not provide audit working papers. The regulator said this sustained non-cooperation indicated possible attempts to suppress material information and obstruct the regulatory investigation.
