Shares of Refex Industries Ltd plunged to a 20% lower circuit on Friday, sliding to around ₹254.90, its 52-week low, after the income tax (I-T) department disclosed that it had uncovered over ₹1,000 crore in alleged tax evasion and a further ₹250 crore in unexplained overseas investment linked to the Refex group and its associates. The steep fall left shareholders stunned, marking the stock’s lowest level since August 2024. Separately, market regulator Securities and Exchange Board of India (SEBI) has imposed a penalty of ₹10 lakh on Anil Jain, chairman and managing director (CMD) of Refex Industries and a joint penalty of ₹25 lakh on Kamlesh Jain and the Jain Family Trust for insider trading violations involving the shares of the Company.
According to media reports, the tax raids began on 9th December and covered Refex Industries, the group’s flagship company, alongside financiers, hawala operators, jewellery businesses, and entities believed to be associated with the promoters. Quoting sources from the tax department,
a report from DT Next says, the searches revealed ₹1,112 crore in suspected bogus purchases, primarily connected to coal procurement and ash-handling contracts.
The department also reportedly traced equity contributions worth ₹382.68 crore routed through 53 individuals and entities, including a set of non-filers and others who reportedly did not disclose the transactions in their tax returns. Many contributors are understood to be employees or close associates of the promoters, leading authorities to suspect the use of benami channels to infuse unaccounted funds. Seized documents further indicated a US$30mn (million) investment in Swiss pharma company Astro Viz and ₹115 crore pumped into DN Energy Ltd, with investigators examining the origins and subsequent diversion of these funds,
a report from Times of India says.
In addition, reports alleged that shell companies were created in the name of the promoter’s driver to move cash deposits of ₹8.5 crore and facilitate transactions exceeding ₹200 crore. The promoter’s personal spending on a private jet valued at ₹37 crore, luxury cars worth ₹10 crore, and watches costing ₹4 crore has also come under scrutiny, it added.
Parallel searches on financier Rajesh Surana revealed that ₹312 crore had allegedly been advanced to Aradhya Infra and then onward to other entities. Hawala operators suspected of routing more than ₹10 crore through unauthorised channels are also being examined.
The department says it has so far identified over ₹1,000 crore in unaccounted income and seized around ₹70 crore in unaccounted cash, gold, and silver. The investigation remains underway.
The company,
in a series of statements to the stock exchanges and the public, confirmed that search operations are in progress and emphasised that it was fully cooperating with the authorities. It added that business operations remain unaffected.
Refex cautioned stakeholders against relying on unverified or speculative information circulating on social media, stating that many of the claims being shared were misleading and not backed by official disclosures.
SEBI Slaps ₹35 Lakh in Penalties on CMD Jain, Others
Refex Industries, listed on BSE and NSE, had reported exceptionally strong financial performance for the quarter ended 31 March 2023. The company's income recorded a sharp rise on both quarterly and yearly bases, resulting in a significant surge in its share price after the results were made public on 18 May 2023. SEBI noted that this information constituted unpublished price-sensitive information (UPSI), which remained confidential from 29 March 2023 until disclosure.
SEBI established that Mr Jain, being actively involved in the company's management and part of performance review meetings, had advance knowledge of the favourable financial results. The regulator concluded that he communicated this UPSI to his close acquaintance Kamlesh Jain, with whom he exchanged calls during the UPSI period. Call data records revealed conversations between them on 7th April and 13 May 2023, shortly before trades were executed by the Jain Family Trust.
According to SEBI, the Jain Family Trust, managed by trustee Kamlesh Jain, purchased 13,473 shares of Refex Industries on 15th May and 16 May 2023, just days before the public announcement of the results. Immediately after the results were declared, the Trust sold all the shares on 19th May and 22 May 2023, yielding unlawful profits of ₹12.33 lakh. SEBI observed that during the UPSI period, the Trust traded only in the Refex Industries scrip, despite normally trading across multiple stocks.
After evaluating all material evidence, SEBI held Anil Jain guilty of communicating UPSI in violation of Regulation 3(1) of the PIT Regulations and Section 12A(e) of the SEBI Act. It also found Kamlesh Jain and the Jain Family Trust guilty of trading while in possession of UPSI, thereby violating Regulation 4(1) and Sections 12A(d) and (e) of the Act.
Accordingly, SEBI imposed a monetary penalty of ₹10 lakh on Anil Jain and ₹25 lakh jointly and severally on Kamlesh Jain and the Jain Family Trust.
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