SEBI finds ₹1,035.27 crore gold mine claim by Rajesh Exports unsubstantiated

This is a confirmatory order by SEBI regarding Rajesh Exports Limited (REL) and Rajesh Mehta, confirming interim directions issued due to alleged financial misrepresentations, non-disclosure of material information, and non-cooperation with the investigation.

Who it concerns: Rajesh Exports Limited (REL), Rajesh Mehta

What SEBI found or ordered

• SEBI confirmed the interim directions requiring the Noticees to cooperate with the Investigating Authority and provide documents.
• SEBI found prima facie violations of the SEBI Act, PFUTP Regulations, LODR Regulations, and the Companies Act, 2013.
• SEBI identified non-disclosure of consolidated financial information for overseas subsidiaries and step-down subsidiaries.
• SEBI found misrepresentation of financial statements, including incorrect consolidation and unsubstantiated claims of 'Investment in Gold Mines in Africa' amounting to INR 1,035.27 crore.
• SEBI noted discrepancies in trade receivables and payables, with adjustments accounting for approximately 98%-99% of standalone trade receivables for four overseas entities.
• SEBI found substantial undisclosed related-party transactions involving Rajesh Mehta, his son Siddharth Mehta, and the entity Elest Pvt. Ltd.
• A forensic audit was conducted by BDO India Services Pvt. Ltd., which was hampered by the Noticees' non-cooperation.

Also in the document

• The order involves a multi-layered corporate structure with entities in India, Singapore, Switzerland, the USA, and the UAE.
• The alleged 'Investment in Gold Mines in Africa' of INR 1,035.27 crore was found to be unsubstantiated and unverifiable by SEBI.
• The interim directions remain in force until further orders, pending the conclusion of the investigation.