Gensol fiasco: After Arun Menon, two more independent directors resign from Gensol Engineering

The resignations come after Sebi on Tuesday barred Gensol Engineering and its promoters -- Anmol Singh Jaggi and Puneet Singh Jaggi -- from the securities markets till further orders in a fund diversion and governance lapses case.

Gensol Engineering which is facing allegations of misuse of funds, two more independent directors -- Harsh Singh and Kuljit Singh Popli -- have tendered their resignations after independent director Arun Menon resigned, saying there was growing concern on leveraging its balance sheet to fund capex of other businesses and sustainability of servicing such high debt costs by the company.

Harsh Singh said he knows that he has decided to resign "at a time when the company is facing a difficult time", in his resignation to the board of directors. Singh said his professional commitments are coming in the way of his contribution to the company in a useful manner.

However Kuljit Singh Popli said he is pained from the recent developments reported in the media related to the company."I was hoping for some positive developments to happen in the past one month, however, the way things have unfolded and come to light I am not in a position to continue as Independent Director," he said.

Popli said he was hopeful that the company, which has grown so fast and has enjoyed a good reputation and goodwill, will continue to grow and create value for all stakeholders, and governance issues, as brought out will be addressed. However, that has not happened, he said.

The resignations come after Sebi on Tuesday barred Gensol Engineering and its promoters -- Anmol Singh Jaggi and Puneet Singh Jaggi -- from the securities markets till further orders in a fund diversion and governance lapses case.

In his resignation letter addressed to Anmol Singh Jaggi, Menon said, "There was growing concern on the leveraging of GEL balance sheet to fund the capex of other businesses; and the sustainability of servicing such high debt costs by GEL." The markets watchdog also directed Gensol Engineering Ltd (GEL) to put on hold the stock split announced by it and restrained promoters from holding the position of a director or a key managerial personnel in any listed firm.

The order came after Sebi received a complaint in June last year relating to the manipulation of share price and diversion of funds from GEL and thereafter started examining the matter.

*With Agency Inputs