Stock Market
Why LIC stock fell after SEBI's action against Rajesh Exports
Mumbai/IBNS: Shares of Life Insurance Corporation of India (LIC) declined on Thursday after market regulator SEBI initiated action against Rajesh Exports and its promoter-chairman Rajesh Mehta over alleged financial irregularities, media reports said.
LIC shares fell around 1 percent as investors reacted to concerns arising from the insurer's exposure to Rajesh Exports.
LIC's Stake Comes Under Focus
The decline in LIC's share price followed heightened scrutiny of its 10.8 percent stake in Rajesh Exports after SEBI's regulatory action against the company.
Market participants closely tracked the development amid concerns over the potential impact of the investigation on institutional investors holding shares in the jewellery exporter.
The Securities and Exchange Board of India (SEBI) on Wednesday barred Rajesh Mehta from buying, selling or otherwise dealing in the securities of Rajesh Exports until further orders.
Allegations Against the Company
SEBI's probe has flagged several alleged irregularities in the company's financial reporting and disclosures, including:
- Manipulation of books of accounts over multiple financial years beginning FY2021.
- Inflation of revenues through transactions involving overseas subsidiaries.
- Alleged misrepresentation of 99.8 percent of reported revenues, amounting to approximately Rs. 15.2 lakh crore, attributed to subsidiaries between FY21 and FY25.
- Failure to disclose an investment of Rs. 1,035 crore in gold mining assets in Africa in the standalone financial statements of Rajesh Exports and its subsidiaries for FY2023.
Responding to the regulator's findings, Rajesh Exports said there was no overstatement of revenues in its financial statements.
"There seems to be some type of communication gap and confusion between SEBI and the company," the company said, as quoted by NDTV Profit.
"The revenues declared by the company are correct and there is no over-stating of revenues," it added.
Rajesh Exports, one of India's largest gold exporters and jewellery manufacturers, has long been a prominent player in the bullion and precious metals industry.
The company gained global attention after acquiring Swiss gold refinery Valcambi in 2015.
However, the latest regulatory action has raised serious concerns over its corporate governance practices and financial transparency, triggering a sharp sell-off in the stock.
Support Our Journalism
We cannot do without you.. your contribution supports unbiased journalism
IBNS is not driven by any ism- not wokeism, not racism, not skewed secularism, not hyper right-wing or left liberal ideals, nor by any hardline religious beliefs or hyper nationalism. We want to serve you good old objective news, as they are. We do not judge or preach. We let people decide for themselves. We only try to present factual and well-sourced news.
Support objective journalism for a small contribution.
