Rajesh Exports case quasi-judicial issue, must be complied with or challenged as per law: SEBI Chairman

MUMBAI: Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey on Monday declined to comment on the regulator’s action against Rajesh Exports, saying the matter forms part of a quasi-judicial process and should be addressed through legal procedures.

“As a matter of principle, we do not comment on individual cases in the media. This is, in fact, a quasi-judicial process in which orders are issued, and they must be complied with or challenged through the procedures provided by law. Therefore, I will not be making any comments on the matter,” Pandey told reporters on the sidelines of the India Investor Conference here.

Pandey also said that the regulator’s tokenisation pilot programme would take another six to nine months while commenting on upcoming regulations for bond brokers and tokenisation initiatives.

His remarks come days after SEBI barred Rajesh Exports promoter and CEO Rajesh Mehta from dealing in the company’s securities after alleging financial irregularities, diversion of funds and inadequate disclosures related to fund flows and related-party transactions.

Rajesh Exports shares remained under pressure, hitting the lower circuit for the third consecutive trading session. The stock on Monday touched its lower circuit limit and an intraday low of Rs 94.50 on the BSE, marking a decline of around 5 per cent.

Last week, the stock declined for two consecutive sessions and hit lower circuit limits after SEBI issued an interim order alleging large-scale misrepresentation of financial statements.

According to the market regulator’s interim findings, investigations prima facie revealed instances of routing and layering of funds through personal accounts and related entities without adequate disclosures or supporting documentation.

SEBI said repeated opportunities were provided to the company to furnish accurate financial statements and explain the end-use and beneficiaries of fund flows, but the responses remained unsatisfactory.

In addition, the regulator flagged alleged non-cooperation by statutory auditors, stating that audit working papers were not provided despite assurances during depositions.

According to SEBI, such sustained non-cooperation indicated possible attempts to suppress material information and obstruct regulatory investigations.