Rajesh Exports May Face PLI Removal, MCA Probe after Sebi Flagged Financial Fraud

The Ministry of Heavy Industries (MHI) is likely to remove Rajesh Exports from the list of beneficiaries under the production-linked incentive (PLI) scheme for batteries, while the Ministry of Corporate Affairs (MCA) may order a probe into potential governance lapses at the company, Economic Times reported. This comes after the Sebi passed an interim order against the firm on June 3 that flagged massive misrepresentation of financials

A government official told ET that the MHI is examining the Sebi order and there is a strong view within the ministry that the company should be removed as a beneficiary, with a final decision expected after a detailed internal examination.

Another official told the publication the MCA is in touch with Sebi over the matter and may ask the relevant Registrar of Companies to undertake an inspection if required, adding that Sebi is currently taking the lead in the case.

Rajesh Mehta Chairman and MD of Rajesh Exports, reportedly said the company is yet to receive any communication from either ministry. He described the Sebi action as an interim order containing observations, not allegations, and said it did not warrant any questions by the MCA, ET reported. On the PLI scheme, Mehta told the publication there had been no adverse communication from the ministry and that the matter was unrelated to the scheme.

Rajesh Exports was selected under the MHI-administered ₹18,100-crore National Programme on Advanced Chemistry Cell Battery Storage to establish 5 GWh capacity.

According to an MHI probe, the company had allegedly erected only a boundary wall and a shed at the battery manufacturing site. Its arm, ACC Energy Storage, is executing the project. The company is yet to receive any subsidy under the scheme.

Sebi's Order

On June 3, Sebi passed an interim ex-parte order against Rajesh Exports and Mehta, citing prima facie findings of financial misrepresentation and fund-routing irregularities.

The regulator alleged that 97-99% of the company's consolidated revenue came from overseas subsidiaries, particularly Switzerland-based Valcambi SA, without adequate disclosures, amounting to a misrepresentation of around ₹15.15 lakh crore in revenues between FY21 and FY25.

Sebi further alleged that these were non-genuine entries linked to Mehta's personal derivative trades, used to inflate turnover without real economic activity. It also flagged non-cooperation by the company's statutory auditors, who failed to provide audit working papers despite commitments to do so.

The regulator directed Rajesh Exports and Mehta to cooperate with investigators within 30 days, ordered the appointment of a new forensic auditor, and restrained Mehta from buying, selling or dealing in the company's securities until further orders.

Mehta denied the allegations on June 4, telling Moneycontrol that the interim order contained nothing true and that the company was in the process of studying it and preparing a response.

Shares of Rajesh Exports fell 5% to ₹98.73 on the NSE on Friday, extending a two-day decline to around 10%.