Shares of Rajesh Exports remained under heavy selling pressure on Monday, hitting the 5% lower circuit limit for the third consecutive trading session following Sebi's interim order alleging financial irregularities and diversion of company funds through promoter-linked entities and personal accounts.

The stock was locked at its lower circuit limit of ₹94.50, down ₹4.95 or 4.98%, extending losses after details of the regulator's investigation became public.

The Securities and Exchange Board of India (Sebi), in its interim order dated June 3, alleged that Rajesh Exports had inflated its financial figures and routed company funds through entities linked to promoters without adequate disclosures. The regulator also raised concerns regarding corporate governance practices and compliance with listing regulations.

According to the order, Sebi alleged revenue inflation amounting to approximately ₹15.15 lakh crore during the period from FY21 to FY25. The regulator is currently examining the company's financial records and related-party transactions as part of the ongoing investigation.

Responding to the allegations, Rajesh Exports stated that it had already submitted between 300 GB and 400 GB of documents to Sebi and believes the regulator may not have identified the relevant records within the large volume of data provided. The company said it would resubmit all requested documents within the next 15 days.

Founder and Chairman Rajesh Mehta strongly disputed the regulator's findings, claiming that Sebi had incorrectly interpreted financial data. According to Mehta, the alleged inflation figure resulted from confusion between EBITDA and revenue figures.

He stated that EBITDA represents gross profit and alleged that the regulator had mistakenly treated gross profit figures as revenue, leading to what he described as a significant error in the calculation. The company maintains that its financial statements accurately reflect its business operations and that the allegations will be clarified through the submission of additional documentation.

Meanwhile, Sebi Chairman Tuhin Kanta Pandey declined to comment on the merits of the ongoing case, stating that individual matters under investigation are subject to a quasi-judicial process and must proceed according to the legal framework established by the regulator.

The case remains under regulatory review, and market participants are closely monitoring developments given the seriousness of the allegations and their potential impact on investor confidence and corporate governance standards.