New Delhi: Rajesh Exports, one of the beneficiaries of the government’s Production-Linked Incentive (PLI) scheme for Advanced Chemistry Cell (ACC) battery storage, may soon face removal from the programme as the Ministry of Heavy Industries (MHI) reviews serious allegations raised by the Securities and Exchange Board of India (SEBI).
According to reports, the ministry is actively examining the findings contained in SEBI’s interim order against the Bengaluru-based company. Sources indicate that there is a strong opinion within the department favouring the immediate disqualification of Rajesh Exports from the battery storage incentive scheme. A final decision is expected to be taken shortly and will be placed before Heavy Industries Minister H.D. Kumaraswamy, who recently returned from an official visit to Kyrgyzstan.
The potential action against Rajesh Exports comes after SEBI issued a detailed 109-page ex parte interim order on June 3, alleging large-scale financial irregularities involving the company and its subsidiaries. The market regulator claimed that the company had materially misrepresented revenues amounting to approximately ₹15.15 lakh crore between the financial years 2020-21 and 2024-25. According to SEBI, nearly 99.8 per cent of the revenues reported by certain subsidiaries during the period were not accurately represented.
The regulator’s findings also highlighted concerns regarding alleged fund diversion, undisclosed related-party transactions, and significant lapses in corporate disclosures. These allegations are linked to Elest Pvt Ltd and ACC Energy Storage Pvt Ltd, entities associated with Rajesh Exports’ lithium-ion battery manufacturing venture, a key component of its participation in the government’s ACC battery programme.
Following its preliminary findings, SEBI imposed restrictions on Rajesh Exports promoter and Chairman Rajesh Mehta, barring him from buying, selling, or otherwise dealing in the company’s securities until further orders. The regulator has also directed that a fresh forensic audit of the company’s books be conducted to assess the extent of the alleged irregularities.
The developments have drawn particular attention from the Ministry of Heavy Industries because the ministry administers the ACC battery storage PLI scheme, one of the flagship initiatives aimed at boosting domestic manufacturing of advanced battery technologies and reducing India’s dependence on imports. Rajesh Exports had emerged as one of the selected beneficiaries under the programme and had announced ambitious plans to establish large-scale lithium-ion cell manufacturing facilities.
However, the company has strongly disputed SEBI’s allegations and insists that the regulator’s conclusions are based on a misunderstanding of financial data rather than evidence of fraud.
Speaking to PTI, Rajesh Exports founder and chairman Rajesh Mehta stated that the company had already submitted between 300 and 400 gigabytes of documents to SEBI during the course of the investigation. According to him, the regulator may not have located the relevant files, leading to confusion regarding the company’s financial records.
“We had given them 300-400 GB documents, running into lakhs of pages. I think they have not been able to find the correct documents. The whole confusion has happened there,” Mehta said.
He further argued that SEBI had allegedly mistaken EBITDA figures for revenue figures. EBITDA, or Earnings Before Interest, Taxes, Depreciation and Amortisation, represents a measure of operating profit rather than total sales revenue.
According to Mehta, the regulator incorrectly treated gross profit figures as revenue, leading to the enormous discrepancy highlighted in the interim order. He used examples from the company’s gold trading business, explaining that Rajesh Exports operates on extremely high volumes and thin margins. In such transactions, the revenue consists of the full value of sales, while profit represents only a small fraction of the turnover.
Mehta maintained that the company routinely purchases gold at one price and sells it at a marginally higher rate, generating relatively small profits compared to overall sales volumes. He contended that SEBI’s calculations mistakenly treated these profit figures as revenue, thereby creating the appearance of large-scale misreporting.
The company has announced that it will resubmit all necessary documents within 15 days to help clarify the matter. Rajesh Exports has also stated that it is fully cooperating with the ongoing investigation and remains committed to addressing all concerns raised by the regulator.
