Rajesh Exports Submits 400 GB Documents to Sebi, Faces Difficulty in Accessibility

Rajesh Exports Denies Sebi's Allegations of Revenue Inflation

Rajesh Exports, a leading gold refiner and jewellery exporter, has responded to the markets regulator Sebi's interim order alleging revenue inflation of Rs 15.15 lakh crore over FY21-FY25. The company's founder and chairman, Rajesh Mehta, has claimed that Sebi's order is rooted in a fundamental accounting error.

According to Mehta, Sebi has taken the company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) figures and classified them as revenue. EBITDA represents the company's gross profit, which is not the same as revenue. Mehta has explained the alleged error using a jewellery shop analogy, where a customer buying 2 grams of gold at a showroom would receive a bill of Rs 30,000, which constitutes the revenue. The gross profit on that transaction would be Rs 1,000, and the net profit Rs 500. Mehta has alleged that Sebi has recorded the Rs 1,000 gross profit as the revenue figure rather than the Rs 30,000 top line.

Mehta has also stated that Sebi's own interim order used qualified language, indicating that the regulator had doubts about the allegations. He has argued that inflating revenues serves no purpose for a company and that such manipulation would not be beneficial. Mehta has further emphasized that full revenue disclosure is mandated by law, and that the company is transparent in its financial reporting.

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The interim order also barred Mehta from buying, selling or dealing in the company's own securities pending further proceedings. Mehta has stated that he never trades and is not bothered by the order. He has also assured that the company's offices and books are open to any inspection at any time and that a fresh forensic audit can be conducted.

Mehta has expressed confidence in a favourable outcome and has assured shareholders that the company has done no wrong. He has stated that the company's books are absolutely clear and clean, and that he is confident that the shares will recover their original value once the matter is resolved.

| Comparison of Sebi's Allegations and Rajesh Exports' Explanation | | --- | --- | | Sebi's Allegation | Rajesh Exports' Explanation | | Revenue inflation of Rs 15.15 lakh crore | Fundamental accounting error in classifying EBITDA as revenue | | EBITDA figures used as revenue | EBITDA represents gross profit, not revenue | | Company's top line inflated | Company's top line is not inflated, but rather gross profit is misclassified as revenue |

Note: The table above presents a comparison of Sebi's allegations and Rajesh Exports' explanation of the alleged revenue inflation.

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