Shares of Rajesh Exports fell 5% and hit the lower circuit on June 4 after SEBI issued an interim order alleging large-scale financial misrepresentation by the company.

According to the regulator, Rajesh Exports and certain related entities allegedly misrepresented consolidated revenues amounting to approximately ₹15.15 lakh crore during FY21 to FY24. SEBI also alleged misrepresentation of standalone revenues totaling ₹12,557 crore during the same period.

The regulator noted that between 97% and 99% of the company's consolidated revenue was generated through its foreign subsidiaries, particularly Switzerland-based Valcambi SA. SEBI's preliminary findings suggest that a substantial portion of the reported revenue may not accurately reflect genuine underlying business transactions.

As part of the interim order, SEBI has imposed restrictions on promoter Rajesh Mehta and certain associated entities while directing a deeper examination of the company's financial reporting practices. The regulator's action follows concerns regarding the accuracy and reliability of disclosures made to investors and stock exchanges.

The development triggered a sharp negative reaction in the stock market, with Rajesh Exports shares hitting the lower circuit limit as investors assessed the potential regulatory, financial, and reputational impact on the company.

The case is expected to remain under close scrutiny as SEBI continues its investigation and evaluates whether additional enforcement actions are warranted based on the findings.