SEBI Allegations Put Rajesh Exports’ Battery PLI Incentives at Risk
The decision to remove Rajesh Exports from the production-linked incentive (PLI) scheme for advanced chemistry cell (ACC) battery storage is expected to be made by the Ministry of Heavy Industries (MHI) in the coming days. This action is being conducted in response to an interim order from SEBI that has been issued against the company, citing widespread financial irregularities.
According to ministry sources who spoke with a news agency, the department has a "strong view" that Rajesh Exports ought to be withdrawn from the scheme. Heavy Industries Minister H D Kumaraswamy is scheduled to be briefed on the situation after his recent official visit to Kyrgyzstan. In the next days, a final decision will be made.
Financial Irregularities at Rajesh Exports
A 109-page ex parte interim order was issued by the SEBI on June 3. Rajesh Exports was accused by the regulator of inflating revenues by INR 15.15 lakh crore between FY21 and FY25 in the ruling. There was a major misrepresentation of about 99.8% of the revenues reported for the company's subsidiaries throughout the period, as per SEBI. Two companies associated with Rajesh Exports' lithium-ion cell business, Elest Pvt Ltd and ACC Energy Storage Pvt Ltd, were also accused by the regulator of fund diversion, opaque related-party transactions, and disclosure violations.
Until additional proceedings are concluded, Rajesh Exports' promoter and chairman, Rajesh Mehta, is forbidden by SEBI from purchasing, selling, or dealing in the company's stocks. A new forensic assessment of the business' records has also been mandated by the market regulator. The conclusions of SEBI are being reviewed by the Ministry of Heavy Industries, who are responsible for the ACC battery storage PLI scheme, in order to determine the next steps to take. While denying the charges made by SEBI, Rajesh Mehta and Rajesh Exports have stated that they are assisting with the probe.
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Some Interesting Facts of the Story |
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1.Rajesh Exports has historically been
known as a global gold and jewellery player, but in recent years diversified
into the battery manufacturing sector through the ACC PLI programme. 2.SEBI has ordered a fresh forensic audit,
a step typically reserved for cases involving serious concerns about
financial reporting and corporate governance. 3.Rajesh Mehta claims the dispute stems
from an accounting interpretation issue, arguing that SEBI treated EBITDA
(earnings before interest, taxes, depreciation, and amortisation) as revenue. |
Rajesh Mehta Responded to SEBI’s Allegations
The chairman, Rajesh Mehta, claims that the suspected fraud amount was inflated because SEBI mistakenly considered EBITDA as income. He went on to say that out of the 300–400 GB of data that was submitted, the regulator was unable to find the correct files. He claims no money went through his personal accounts or unnamed organisations, and he promises to resubmit all paperwork within 15 days.
Mehta, however, asserted that the company's books are clean. Further, he has welcomed a forensic audit and predicts share prices will recover once clarifications are made. According to what Mehta said, SEBI has reclassified EBITDA as revenue. EBITDA corresponds to gross profit. The regulator has taken the gross profit and termed it 'revenue'. As far as the figure (INR 15.15 lakh crore) is concerned, SEBI has erred greatly.
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Quick Shots |
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•MHI is considering removing Rajesh Exports
from the ACC Battery Storage PLI scheme. •The move follows an interim SEBI order
alleging major financial irregularities at the company. •A final decision is expected after Heavy
Industries Minister H D Kumaraswamy reviews the matter. •SEBI issued a 109-page ex parte interim
order on June 3. |
