IREDA files second bankruptcy case against Gensol Engineering over alleged fraud

SEBI alleged in April that Gensol had defaulted on loans, including those taken to finance the EVs purchased for BluSmart

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26 Aug, 2025 12:21

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Indian Renewable Energy Development Agency (IREDA) on Friday said it has filed a second bankruptcy application against Gensol Engineering's electric vehicle leasing unit, two days after filing a bankruptcy case against the troubled company.

In a regulatory filing, IREDA said, "This is to inform you that the company has filed an application under Section 7 of Insolvency and Bankruptcy Code, 2016 on May 15, 2025 against M/s Gensol EV Lease Limited which is a subsidiary of M/s Gensol Engineering Limited (Listed company) for an amount of default of Rs. 218.95 crore (Rupees Two Hundred and Eighteen Crore Ninety Five Lakh)."

Gensol has also procured electric vehicles on behalf of ride-hailing service BluSmart. Gensol's former managing director, Anmol Singh Jaggi, is BluSmart's co-founder.

Last month, in an interim order, Sebi barred Gensol Engineering and promoters -- Anmol Singh Jaggi and Puneet Singh Jaggi -- from the securities markets till further orders in a fund diversion and governance lapses case.

On May 12, Jaggi brothers resigned from the company following market regulator Sebi's interim order, according to an exchange filing. Anmol Singh Jaggi held the post of Managing Director while Puneet Singh Jaggi was a Whole-time Director. Meanwhile, Gensol Engineering on Wednesday said the Securities Appellate Tribunal (SAT) disposed of its appeal but allowed the company to file its response on Sebi's interim order to bar the firm and its promoters from the securities market.

In a regulatory filing, the company said the appeal filed by it before the SAT has been disposed of, granting it an opportunity to file its response to Sebi's interim order within two weeks. It further informed that the markets regulator has been given directions to hear the company within two weeks thereafter and pass an appropriate order within four weeks.

The tribunal has given no observations on Sebi's interim order, it stated. In its order on April 15, 2025, the Sebi also debarred Jaggi brothers from holding the position of a director or key managerial personnel in Gensol until further orders.

The order came after the Securities and Exchange Board of India (Sebi) received a complaint in June 2024 relating to the manipulation of share price and diversion of funds from GEL and thereafter started examining the matter.

In the 29-page order, Sebi had said, "The prima facie findings have shown mis-utilisation and diversion of funds of the company (GEL) in a fraudulent manner by its promoter directors, Anmol Singh Jaggi and Puneet Singh Jaggi, who are also the direct beneficiaries of the diverted funds". Gensol Engineering's promoters treated the listed company as a proprietary firm, diverting corporate funds to buy a high-end apartment in The Camellias, DLF Gurgaon, splurging on a luxury golf set, paying off credit cards, and transferring money to close relatives, Sebi said in its interim order.

"The company has attempted to mislead Sebi, the CRAs (credit rating agencies), the lenders and the investors by submitting forged conduct letters purportedly issued by its lenders," the regulator had said. The noticees 1, 2 and 3 (GEL, Anmol and Puneet Singh Jaggi) are alleged to have violated the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) rules, it had added.

Sebi had noted that the promoters were running a listed public company as if it were a proprietary firm. GEL's funds were routed to related parties and used for unconnected expenses as if the company's funds were promoters' piggy banks. According to the regulator, the company secured a total of Rs 977.75 crore in loans, of which Rs 663.89 crore was meant specifically for the purchase of 6,400 electric vehicles (EVs). EVs were procured by the company and subsequently leased to BluSmart, a related party.

The result of these transactions would mean that the diversions at some time need to be written off from Gensol's books, ultimately resulting in losses to the investors of the company.

The internal controls at Gensol appear to be loose, and through the quick layering of transactions, funds have seamlessly flowed to multiple related entities/individuals, the regulator had said. It had also directed the firm to appoint a forensic auditor to examine the books of accounts of Gensol and its related parties.
*With Agency Inputs