Rajesh Exports chairman Rajesh Mehta has distanced the company from concerns surrounding Life Insurance Corporation of India’s exposure to the gold jewellery firm, asserting that the insurer’s investment decisions were independent and accumulated over decades, while stressing that retail shareholders ultimately benefit from market activity.
Speaking amid regulatory scrutiny and a sharp decline in the company’s stock, Mehta also said the company had no role in LIC’s stake build-up and no visibility into its operations or decisions.
LIC currently holds a 10.80 per cent stake in Rajesh Exports.
Mehta clarified that the insurer’s holding was built entirely through secondary market transactions over a long period.
"LIC has not purchased the shares yesterday or last year. LIC's purchases are over a period of time, approximately 20 years. These shares have been taken by LIC from the open market, from the stock market," Mehta told PTI in an interview.
He further emphasised that the promoters never facilitated any sale to LIC.
"No promoter has ever sold his shares to LIC. The company has never made a placement to LIC. By the buying of shares by LIC, the company or the promoters have never benefited in any manner," he said.
Mehta also said the firm had no connection with LIC’s investment strategy or internal functioning.
"We don't even know where LIC's office is. We have no contact, no connection. This decision of buying shares through the secondary market is their own decision in a prudent commercial manner."
Despite a steep fall in the stock, Mehta said—based on his understanding—that LIC may still not be in a loss-making position.
The stock of Rajesh Exports Ltd has tumbled over 14 per cent since June 3, and hit a new lower circuit limit of Rs 94.50 on Monday.
"Even today, at these pathetic rates and lower rates also, according to my understanding, LIC has still not lost money. This accumulated price, I believe, I have not seen it. I believe this accumulated price still supports," he said.
He went further to argue that any losses, if at all, would translate into gains for other market participants.
"Even if LIC has lost money, and this is the most important statement which I am giving for the first time, who is the counter-gainer? If somebody loses, somebody has to gain. Who is the counterpart who has gained? It is the common Indian public."
"They have taken the shares from the common Indian public, who have benefited. What is wrong with that? Are the people who are speaking against this, against the benefit of the common Indian public?"
On concerns that a potential exit by LIC could pressure the stock, Mehta downplayed the risk and said any selling would benefit retail investors.
"If they are able to sell, let them sell. Let the public buy back.... It is the public which has benefited in this, not the company or the promoter," he said.
LIC, India’s largest institutional investor, has not commented on its position in Rajesh Exports or its future investment strategy regarding the stock.