StartupTalky

Tag: gensol

  • NCLT Freezes Gensol’s Bank Accounts Over Financial Misconduct Allegations

    All of Gensol Engineering Limited’s and its affiliated companies’ bank accounts and lockers have been frozen and attached by the Ahmedabad-based National Company Law Tribunal (NCLT).

    The Ministry of Corporate Affairs (MCA) filed a complaint accusing the corporation of financial mismanagement and substantial corporate fraud, which prompted the action.

    The Reserve Bank of India (RBI) and the Indian Banks’ Association were able to move quickly to secure Gensol’s financial assets since the tribunal granted the government urgent interim relief. The goal is to stop additional financial abuse and evidence manipulation.

    The NCLT added that preliminary evidence points to serious wrongdoing on the part of the company’s promoters. It has mandated that all parties involved receive notices.

    SEBI Barring Jaggi Brothers From Accessing Securities Market

    Only a few weeks have passed since Anmol Singh Jaggi and Puneet Singh Jaggi, Gensol’s top promoters, were subject to severe action from the Securities and Exchange Board of India (SEBI).

    Both were prohibited from holding important managerial positions and from entering the securities market by SEBI on April 15.

    According to the regulator’s inquiry, Gensol misappropriated money obtained through an electric vehicle (EV) purchasing programme that was loan-financed.

    SEBI claims that Gensol borrowed INR 975 crore to buy 6,400 EVs but only bought 4,704 of them, costing INR 567.73 crore. Red flags regarding potential fund misappropriation were raised when more than INR 200 crore could not be accounted for.

    ICRA and Care Ratings Downgraded Gensol

    Credit rating agencies ICRA and Care Ratings downgraded Gensol’s INR 2,050 crore debt to default status in February, further compounding the company’s problems. This comprised about INR 400 crore in short-term borrowings and over INR 1,640 crore in long-term loans.

     Gensol allegedly produced fictitious letters asserting they had been consistent with their debt payments in response to enquiries into the abrupt downgrading. State-run lenders IREDA and Power Finance Corporation (PFC) were purportedly the senders of these letters; however, both subsequently denied supplying any such records.

    Additionally, investigations showed that despite the company’s repeated assurances to rating agencies that repayments were being made on schedule, it started to fall behind on payments as early as December 2024.

    Given these events, Gensol has been requested to delay a recently scheduled stock split. In order to properly examine the company’s and connected parties’ financial records, SEBI has additionally mandated the hiring of a forensic auditor.

    Gensol Engineering’s stock has dropped up to 94% from its peak due to persistent governance and financial problems.

    Gensol shares are now subject to the Enhanced Surveillance Measure (ESM) Stage 2 by SEBI, which limits trading to designated hours of the day.

    Due to serious liquidity problems, it is now impossible for the public and other investors to trade or sell their positions on a regular basis, which raises the possibility that they will be stranded with the shares.

  • Gensol Faces Insolvency Proceedings as Ireda Moves NCLT

    Following Gensol Engineering’s default on a loan of INR 510 crore, the state-run financier Indian Renewable Energy Development Agency (Ireda) filed a petition against the business under Section 7 of the Insolvency and Bankruptcy Code, Ireda said in a stock exchange filing on 14 May.

     The value of stock interests is likely to be destroyed if the National Company Law Tribunal accepts the insolvency petition, and all of the company’s creditors are anticipated to submit their claims to the court-appointed resolution professional for debt resolution.

    Gensol is Navigating Through Troubled Waters

    In addition to other regulatory enquiries, Gensol is being investigated by the Securities and Exchange Board of India (Sebi) for allegedly diverting funds from the listed company by its promoters. Anmol Singh Jaggi and his brother Puneet Singh Jaggi, the founders of Gensol Engineering and BluSmart Cabs, resigned from the Gensol board in response to the Sebi ruling, stating in a letter to the exchanges that their actions were in accordance with Sebi’s directives.

     Puneet served as Gensol’s full-time director, while Anmol served as managing director. Prior to this, Ireda started an internal examination on April 25 in accordance with its own due diligence procedures and Reserve Bank of India rules.

    Ireda claimed that the promoters had violated the terms of the contract by diluting their shareholdings without the lenders’ consent. As a result, on April 24, Ireda complained to the Economic Offences Wing about the aforementioned issues with Gensol.

    RBI Probes E-Wallets After BluSmart Collapse

    According to various media reports, India’s central bank is investigating some digital wallets linked to electric vehicle companies after the abrupt demise of the nation’s biggest all-EV taxi service prevented customers from accessing funds linked to their accounts.

    The issues encountered by customers of the digital wallet of the app-based ride-hailing service BluSmart led to a review of the payment methods utilised in India’s nascent EV ecosystem.

    The incidents brought about by the company’s alleged fraud exposed the absence of protections for customers who deposit funds into so-called closed-loop wallets in order to conduct transactions on apps, particularly those that deal with EVs like charging stations or ride-booking.

    According to various published reports, the Reserve Bank of India has started informal conversations with operators of EV charging stations and other app-based EV platforms in order to evaluate potential consumer hazards.

     In India’s rapidly expanding digital services ecosystem, so-called closed-loop wallets—app-based payment systems that are limited to use on a single platform—have become widely available. Since the central bank does not actively supervise these wallets like it does open-system wallets under its regulation, they are more susceptible to platform failure.

    In April, BluSmart informed customers that it could take up to 90 days to reimburse money after thousands of users who had preloaded money into the wallet to book trips within the city and at the airport were unable to secure a refund or move the money to another location.

  • Gensol’s Puneet Singh Jaggi Detained in FEMA Probe Over Alleged Fund Diversion

    Anmol and Puneet Singh Jaggi, promoters of Gensol Engineering Ltd, are now facing severe legal repercussions and conditions following their detention under the Foreign Exchange Management Act (FEMA). The Enforcement Directorate rounded up Puneet Singh Jaggi in Delhi while also conducting raids across Delhi, Gurugram, and Ahmedabad. This probe was initiated off the back of a Securities and Exchange Board of India (Sebi) report that flagged several problems, including serious financial misconduct and the apparent misuse of company funds. Anmol Singh Jaggi is currently reported to be in Dubai, an alleged haven for fugitive Indian businessmen.

    Allegations of Misuse and Missing Funds

    Sebi’s preliminary findings allege that Gensol and the Jaggi brothers misappropriated funds. Gensol, as per Sebi, borrowed a total of about 1,000 crore (INR 977.75 crore) from public sector banks and institutions like the PFC and IREDA at cheap rates, using the money to procure not EVs but something else altogether. They say some of these funds might have made their way into the accounts of Gensol and Jaggi’s other companies and that this might be the reason for the discrepancies.

    Investigators discovered that a significant amount of money was funneled into Gensol or moved to companies associated with the Jaggi family. They also learned that these funds were being used for personal and family expenses. In short, a big chunk of the money that was supposed to be going to Gensol was instead being sent to pay for stuff like the Jaggi family’s daughter-actresses’ performances at charity events and for renovations of some celebrity that Jaggi maintains.

    Lavish Spending Raises Eyebrows

    The investigation is revealing the depth of personal enrichment using company resources. About INR 42.94 crore went through Anmol Singh Jaggi’s Capbridge Ventures to pay for a luxury apartment in the upscale DLF Camellias. That wasn’t enough to satisfy this alleged scheme’s appetite. Around INR 50 lakh was allegedly funneled to Ashneer Grover’s startup, Third Unicorn.

    The personal gratification and profit reflected in our findings is alarming. Anmol’s mother received over INR 6.2 crore and his wife nearly INR 3 crore in the transfers of bribery money. Puneet and Anmol lavished their families with a total of just over INR 5 crore. Spending at that level obviously meant inflating all sorts of costs, and the auditors found plenty of instances overvaluing everything from fancy golf clubs to travel in first class on MakeMyTrip.

    Impact on Investors and Corporate Governance

    The financial irregularities have had a direct impact on Gensol’s market performance. Since Sebi released its interim report, the stock has fallen more than 22 percent. The company’s promoters, according to regulators, have used Gensol as a personal financial tool and have always put their own interests ahead of those of shareholders.

    Sebi is now pursuing a forensic audit, and the ED is ramping up enforcement actions. The case marks a major setback for corporate governance in India’s renewable energy sector and serves as a cautionary tale for both investor trust and regulatory oversight.

  • Gensol Promoters Accused of Fund Diversion for Personal Gain

    The swift action taken by the Securities and Exchange Board of India (SEBI) against Gensol Engineering Ltd has led to a ban on the company and its promoter directors from engaging in the securities market. The ruling affects Anmol Singh Jaggi and Puneet Singh Jaggi, who headed the firm until very recently. SEBI’s order follows a formal complaint filed in June 2024 that accused Gensol, its promoters, and some other unidentified persons of potential share price manipulation and misuse of shareholders’ funds.

    SEBI’s interim order has pointed out some very serious governance issues. It has alleged that huge sums of corporate money were diverted for personal gain by the very people who were supposed to be looking out for shareholders. The order has also called for an immediate stop to a proposed stock split. The situation with the company looks pretty bad from a transparency and accountability point of view.

    Luxury Homes and Startups: A Trail of Misused Capital

    The investigation centers on a loan of INR 93.88 crore secured by Gensol from the Indian Renewable Energy Development Agency (IREDA). The loan, which was supposed to be used to expand electric vehicle operations, was mostly transferred to Go-Auto Pvt Ltd and then funneled to CapBridge Ventures LLP — a company that Anmol Singh Jaggi has a strong influence over. Out of the INR 93.88 crore that was part of the scheme, INR 42.94 crore was used to buy a posh apartment in DLF Camellias, Gurugram.

    Additionally, from the same funds, an investment of INR 50 lakh was made in Third Unicorn, a startup launched by Ashneer Grover. The funds were also used for personal expenses, including travel abroad. SEBI’s findings portray Grover as following a pattern of financial self-interest that put him on the fast track to personal wealth while placing company obligations in jeopardy.

    Personal Expenses Funded by Company Loans

    The regulator’s examination of bank records reveals worrisome activities connected to Puneet Singh Jaggi. They show that around INR 13.55 crore from Wellray, another related company, was used to make transfers that profited Jaggi’s family and friends. Among the outflows were these dubious purchases:

     – Foreign currency, INR 66.36 lakh

     – Payments to American Express, INR 49 lakh

     – Other personal expenditures, more than INR 18 lakh

    In sum, the transfers favored Jaggi and his close associates. SEBI claims that these transactions were neither disclosed nor aligned with the firm’s financial objectives. They are systematic misuse of corporate resources.

    Gensol has drawn the ire of the regulator for what it considers a total breakdown of internal controls. Internal emails and conduct letters allegedly were fabricated to mislead stakeholders, including investors, banks, and rating agencies. Gensol supposedly directed its employees to write these misleading documents. And Gensol’s Board of Directors allegedly knew all about it. If the story holds up, SEBI believes it’ll force Gensol to write off those diverted funds, hitting its balance sheet and making life tougher for its employees.