IREDA moves to file bankruptcy against Gensol Engineering over alleged fraud

The Securities and Exchange Board of India (SEBI) alleged that the brothers were involved in diverting funds raised by the company towards personal luxury purchases and debt defaults.

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

Indian Renewable Energy Development Agency (IREDA), one of two public sector lenders that had loaned money to scam-hit Gensol Engineering for buying electric vehicles, said on Wednesday in a regulatory filing that it has filed a bankruptcy application against Gensol Engineering. It is the first instance of a creditor taking the embattled firm to the National Company Law Tribunal (NCLT).

Gensol, a solar energy firm that also procured electric vehicles on behalf of ride-hailing service BluSmart, owes IREDA Rs 510 crore ($59.73 million).

In a regulatory filing it said," In furtherance to our earlier letter dated 25.04.2025 with respect to M/s Gensol Engineering Limited, this is to inform you that the Company has filed an application today i.e. May 14, 2025 under Section 7 of Insolvency and Bankruptcy Code, 2016 against M/s Gensol Engineering Limited, listed company bearing CIN L74210GJ2012PLC129176 for an amount of default of Rs 510,00,52,672."

Gensol's Managing Director Anmol Singh Jaggi and his brother Puneet Singh Jaggi resigned earlier this week, a month after the Securities and Exchange Board of India (SEBI) barred them from holding key positions in the company.

Anmol Singh Jaggi is also a co-founder of BluSmart.SEBI alleged that the brothers were involved in diverting funds raised by the company towards personal luxury purchases and debt defaults.

Earlier, IREDA said the promoters of the firm breached the contract by diluting shareholding without lenders' approval. IREDA said it has filed a complaint with the Economic Offences Wing (EoW) for the contract breach on April 24.

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, Bhatia 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