FC Reported Irregularities In Exports By Rajesh Exports During FY17-FY19

Chennai: While the Securities and Exchange Board of India (SEBI) had barred jewelery exporter Rajesh Exports and its promoter chairman Rajesh Mehta from accessing the securities market over alleged financial misstatements of Rs 15.5 lakh crore between FY21 and FY25, Financial Chronicle had reported irregularities in the company’s exports between FY2017 and FY19.

While gem and jewelery exports from Kochi SEZ rose from negligible levels to Rs 40,888 Million in FY16 following the commencement of operations of Rajesh Exports, total gold jewelery exports from all SEZs in the country fell by 6 percent in FY16 after Dubai introduced 5 percent VAT on gold.

For a report published on November 9, 2019, Financial Chronicle had accessed export data of Kochi SEZ and found that precious stones and jewellery, which was not even a mentioned category in export revenues until fiscal 2016, rose to Rs 6501 billion after Rajesh Exports started operating in the region. This increased to Rs 19,149 Million in FY 2018 and as of FY 2019, Kochi SEZ exported gems and jewelery worth Rs 40,888 Million, accounting for 95 per cent of the total exports in the region.

Officials had told the Financial Chronicle that Rajesh Exports account for most of the exports from the SEZ. There were three other exporters operating from the SEZ: Amy Jewellers, Cochin Art and MTV Jewellers. Between FY 2017 and FY 19, no new unit was opened in the SEZ. On the other hand, in 2018, Sona Diamond and Gold Exporters closed its units in the SEZ after the UAE imposed 5 percent VAT and it became unprofitable for the company to export.

Financial Chronicle was stunned by the rise in jewelery and jewelery exports of Kochi SEZ in two years, as total gold products and gold jewelery exports had fallen by 6 per cent across all other SEZs in the country in fiscal 2019 after Dubai introduced 5 per cent VAT on gold.

Imports of gems and jewelery from Kochi SEZ also increased similarly to exports. Between FY 2017 and FY 18, imports increased by 231 percent. The share of precious stones and jewelery in SEZ’s import basket increased from 80 percent to 92 percent in one year.