Rajesh Exports on Friday dismissed allegations of inflated revenues and claims surrounding share placements to Life Insurance Corporation (LIC), describing them as "speculative inferences" and asserting that it is addressing concerns raised by market regulator Sebi with supporting documents and evidence.
The Bengaluru-based gold jewellery maker said Sebi's interim order has only raised "suspicions on certain aspects" of its operations and that there are "no conclusive adverse findings" against the company.
The clarification comes days after the Securities and Exchange Board of India (Sebi) barred promoter and CEO Rajesh Mehta from dealing in the company's securities. In its June 3 interim order, the regulator alleged large-scale misrepresentation of financial statements and diversion of funds.
In its 109-page order, Sebi alleged that Rajesh Exports inflated its consolidated revenues by more than Rs 15 lakh crore over five years by attributing substantial revenues to overseas subsidiaries, particularly Switzerland-based Valcambi SA, despite the subsidiary's audited standalone financial statements reflecting significantly lower figures.
Responding to the allegations, the company said, "The major point misinterpreted with regard to the revenues of the company is totally misplaced," adding that the revenues reflected in its consolidated financial statements are largely attributable to Valcambi.
Rajesh Exports said it is "a globally accepted fact that Valcambi, wholly-owned subsidiary of Rajesh Exports, is the world's largest, finest and most reputed gold refinery." It added that the company supplies gold bullion to major banks, central banks and large bullion entities worldwide.
Company rejects LIC-related claims
The company also pushed back against reports and commentary linking its shareholding pattern to LIC.
"Some of the media reports and social media postings with regard to scam, fraud, inflated revenues, placement of shares to LIC are totally incorrect, out of place and speculative," Rajesh Exports said.
"The company outright rejects all these speculative inferences."
According to BSE shareholding data, LIC currently holds nearly 11 per cent stake in Rajesh Exports after gradually increasing its investment over time.
The issue has drawn political attention following Sebi's order. The Congress on Thursday alleged a "gigantic scam" and questioned whether LIC's investment in the company was influenced by the ruling establishment.
Shiv Sena (UBT) leader Priyanka Chaturvedi also raised questions about the company's business model, including its expansion into electric vehicle battery manufacturing and the government's allocation of a 5 GWh manufacturing capacity under the production-linked incentive (PLI) scheme.
Says operations are transparent
Defending its conduct, Rajesh Exports said it has always maintained "transparent and absolutely straightforward operations" and that neither the company nor its employees have engaged in "any wrongdoings or misrepresentations".
It further asserted that it has never indulged in any "mis-reporting and all its filings, financial numbers, including revenue, are true and genuine".
The company said it is in the process of responding to every concern highlighted in Sebi's interim order with explanations, documentation and evidence.
"The company is confident that Sebi will appreciate the submissions of the company and clear all the suspicions raised in the interim order," it said.
Rajesh Exports also emphasised that it is a debt-free company and does not rely on external financing for its operations.
The company said it has not raised funds through public offerings since its initial public offering in 1995, when it mobilised Rs 10 crore, and added that it has never undertaken any equity placement with domestic institutional investors.