Rajesh Exports Ltd. (REL) has been booked by market regulator Securities and Exchange Board of India (SEBI) for financial misrepresentation worth approximately Rs 15.15 lakh crore. SEBI has pulled up Rajesh Exports in an interim order and stated that Rajesh Exports has failed to disclose key financial information related to its subsidiaries and step-down subsidiaries, however Rajesh Exports has dismissed SEBI’s allegations and stated, ‘there seems to be some type of communication gap and confusion between SEBI and the company.’ Timesnownews.com spoke to JN Gupta, Former Executive Director, SEBI and given below is what he had to say on the issue.
Q. India’s market regulator, SEBI, has pulled up Rajesh Exports in an interim order and stated that Rajesh Exports has failed to disclose key financial information related to its subsidiaries and step-down subsidiaries, while Rajesh Exports has dismissed SEBI’s allegations and they have said that there seems to be, I quote ‘some type of communication gap and confusion between SEBI and the company. Do you think this is a complete breach of corporate governance norms altogether?
A. I don’t think there could be any doubt with anybody who follows governance related matters. It is a pure 100% breach of governance norms.
Also Read: Rajesh Exports, Bengaluru-Based Gold Refiner, Booked By SEBI For Rs 15.15 Lakh Crore Fraud
Q. What message does this then send out to investors?
A. See the message to investors is very clear that you have to be cautious and read the fineprint, read the balance sheet, study the auditors.
We have been raising issues on Rajesh Exports for at least a decade now…the other thing if you notice, the market cap of the company is around 3000 crores, and if you look at the networth of the company, it is Rs 15,000 cr. Now, it is very, very difficult for a person to believe that for a company like this, which has been in existence for more than 20 years or 25 years, to have a market cap which is one fifth of the net worth.
Q. What can be done to boost transparency so that such situations do not arise?
A. The market regulator has very limited power, very limited bandwidth. Regulators can make rules. Regulators want to enforce the rule. But regulators are not God.
Q. As Former Executive Director, SEBI what is your message to Rajesh Exports at the moment?
A. I would say there is no point hiding behind falsehood. Come out clean, and if you have made mistakes, accept it and move on. Face the consequences. There is no point, because in today’s world, falsehood cannot last long.
Also Read: ‘No Over Stating Of Revenues, Some Communication Gap’: Rajesh Exports On Rs 15.15 Lakh Crore Fraud
