Rajesh Exports faces the possibility of being removed from a government battery manufacturing incentive scheme, according to a report by The Economic Times. The report also stated that the Ministry of Corporate Affairs is considering an investigation into the jewellery maker's financial reporting practices.

This comes after the Securities and Exchange Board of India (Sebi) issued an interim order alleging that the company misrepresented a significant portion of its revenue over a five-year period and diverted company funds without the requisite approvals and disclosures.

In its interim order, Sebi barred Rajesh Exports and its founder and Executive Chairman Rajesh Mehta from accessing the securities market until the completion of its investigation.

According to Sebi, around 97–99 per cent of Rajesh Exports' consolidated revenue originated from its overseas subsidiaries, particularly Switzerland-based Valcambi SA. However, the regulator alleged that the company did not consistently disclose the financial statements of its subsidiaries in the public domain.

Based on its findings, Sebi alleged that Rajesh Exports misrepresented approximately Rs 15.15 lakh crore, or 99.80 per cent of the revenues generated by its subsidiaries between FY21 and FY25.

Responding to the interim order, Rajesh Exports said, "The revenues stated by the Company in it's Financials are correct. The core observation in the order is with regard to the mis-reporting of the revenues, this has emerged primarily due to confusion because SEBI has considered the EBIDTA of Valcambi instead of Revenue hence it has stated that the there is difference of about 97 per cent in the revenue. The consolidated Revenue as stated by the Company is correct."

The company also said, "The entire matter is a result of confusion and communication gap, which the Company is in the process of addressing with Sebi and the Company is confident that it will be able to clarify the matter with SEBI by presenting all the required and relevant documents."

Rajesh Exports: PLI Scheme awardee in 2022

The company was selected for incentive under Production Linked Incentive (PLI) Scheme for Advanced Chemistry Cell (ACC) Battery Storage in 2022.

In 2022, a total of 4 companies were selected for incentive - Reliance New Energy Solar Ltd; Ola Electric Mobility Pvt Ltd; Hyundai Global Motors Company Ltd and Rajesh Exports. 

The Ministry of Heavy Industries had officially declared that these  companies will receive incentives under India's Rs 18,100 crore programme to boost local battery cell production.

Allotment was made for 50 GWh of battery capacity to 4 successful bidders for incentive under (PLI) Scheme for Advanced Chemistry Cell (ACC) Battery Storage.

The manufacturing facility was to be set up within a period of two years; incentive to be disbursed on sale of batteries manufactured in India with emphasis on greater domestic value addition, the ministry stated.

"All the 10 bids were evaluated and 9 companies were found responsive and meeting the conditions of eligibility as per the requirements under the RFP. Accordingly, the Financial bids for the qualified bidders were opened on March 17, 2022 at 11.45 AM after announcement of the results of technical evaluation under transparent global tender process of RFP."

Meanwhile, shares of Rajesh Exports continued to decline on Friday, sliding 5 per cent to hit a low of Rs 99.45. At this level, the stock has crashed 46.16 per cent over the last six months.