Debt Recovery Tribunal bars Gensol promoters from sale or transfer of assets

The tribunal has also asked the court appointed officer to take possession of the Blu Smart cabs that were financed by various lenders.

The Debt Recovery Tribunal (DRT), Delhi, has barred promoters of Gensol Engineering from selling or transfer of ownership of the secured assets of the company, in a petition moved by stated owned NBFC Indian Renewable Energy Development Agency(IREDA). The assets in question are largely Electric Vehicles (EVs) that were financed by non-banking financial companies(NBFCs) including Indian Renewable Energy Development Agency(IREDA) and Power Finance Corporation (PFC).

The tribunal has also asked the court appointed officer to take possession of the Blu Smart cabs that were financed by various lenders.

“concerned defendants are hereby restrained from selling, transferring, alienating, damaging,removing and disposing off or otherwise creating third party interest with regard to secured assets, movable & immovable, as detailed in the said paragraphs, until further orders.” Said the 8 page DRT order dated May 28.

The tribunal has also ordered depositories NSDL and CDSL to provide information regarding Demat accounts and bank accounts that may be related to the promoters of Gensol Engineering. “If any Demat accounts exist, NDSL and CDSL are directed to freeze the account and file the details of shares with this tribunal;” the DRT Delhi order added.
The development comes as various creditors are making attempts to recover Rs 510 crore worth dues.

On April 15, market regulator the Securities and Exchange Board of India(Sebi) had issued an interim order against Gensol Engineering restrained promoters of the company from accessing capital markets and also ordered a forensic audit into the company.

Sebi is probing about Rs 262 crore corporate funds of Gensol which remain unaccounted. Sebi has alleged the promoters of the company have diverted these funds to buy luxury properties amongst other things. Gensol availed Rs 977 crore from IREDA while another Rs 663 crore from PFC. They were made with a commitment that Gensol will buy 6,400 EVs. However, records indicated that the company had purchased only 4,704 EVs.

“This position is corroborated by Go-AutoPrivate Limited (Go-Auto), the stated supplierof the EVs, which confirmed that it sold 4,704 EVs to the Company for a total consideration of Rs. 567.73 Crore.” Sebi said in its interim order dated April 15.

Separately, the Enforcement Directorate(ED) is also probing Gensol promoters for their alleged links to Hari Shankar Tiberwal – a key accused in the Mahadev betting app scam. Hari Tiberwal was an investor in Gensol with 1.37% stake, ED had frozen these shares in April, according to media reports.Also, Ministry of Corporate Affairs(MCA) has also instituted a probe in the case.