Rajesh exports shares hit lower circuit for third day

Government probing on Rs 1,000 worth PLI deal for EV batteries manufacturing

Shares of controversial gems and jewellery firm Rajesh Exports Ltd (REL) hit a fresh lower circuit limit on Monday, tumbling over 14 per cent in the past three days, after the Sebi last week passed an interim order alleging massive financial fraud by the company. The stock tanked 4.98 per cent to hit the lower circuit limit at Rs 94.50 on the BSE. At the NSE, the stock dropped 4.99 per cent to hit the lower circuit limit of Rs 93.80.

Meanwhile, media reported that the Ministry of Heavy Industries (MHI) headed by Union Minister Kumaraswamy, is set to decide in the coming days on removing Rajesh Exports from the list of beneficiaries under the production-linked incentive (PLI) scheme for advanced chemistry cell (ACC) battery storage, after the SEBI last week passed an interim order alleging massive financial fraud by the Bengaluru-based firm. It is learned that Rajesh Exports in 2022, bagged PLI contract for manufacturing EV Batteries contract in India worth more than Rs 1,000 crore worth deal. Sources said, though the company claim the production is create manufacturing India, the major parts of EV Batteries are just imported from China and assemble in Indian factories.

On Monday, ‘The Pioneer’ reported that Rajesh Exports is already facing huge loan recovery suits from Canara Bank from 2020. Controversial businessman Rajesh Mehta led Rajesh Exports, caught recently by Securities Exchange Board of India (SEBI) for inflating the revenue of more than Rs 15 lakh crore, is already large defaulter of Canara Bank with more than Rs 2,458 crore loan dues.

As per conducting a detailed analysis of the TransUnion CIBIL data filed by Canara Bank, Rajesh Exports owes a total of Rs 2,458 crores and the loan amount is split into six entries of Rs 409 each. Canara Bank is now conducting recovery suits at Debut Recovery Tribunal (DRT) in Chennai and three Directors of the company are shows as personal guarantors to this huge loan. The Directors shown as personal guarantors are Rajesh Mehta and his partners Prashant Mehta and S Pramasivan.

The stock of Rajesh Exports Ltd has tumbled 14.20 per cent on the BSE since June 3, following the SEBI action.  The Securities and Exchange Board of India (SEBI) on June 3 barred Rajesh Exports promoter and CEO Rajesh Mehta from dealing in the company’s securities, alleging large-scale misrepresentation of financial statements and diversion of funds.  In a 109-page interim order, the regulator found Rajesh Exports allegedly inflated its consolidated revenues by more than Rs 15 lakh crore over five years by attributing massive revenues to overseas subsidiaries, particularly Valcambi SA, despite the subsidiary’s audited standalone financial statements showing only a fraction of those amounts.

Interestingly, Canara Bank has not approached CBI or ED for cheating against Rajesh Exports and its Directors, though it filed a civil recovery case of just Rs 452 crore in 2021. Rajesh Exports, which now caught by SEBI for inflated revenue of Rs 15 lakh crore also filed a counter case in DRT against the bank, seeking loss of more than Rs 20,456 crore. However, DRT in 2023, has dismissed the fake claim of Rajesh Exports, citing that they have produced fake bills.