Gensol Engineering Ltd promoters Anmol and Puneet Singh Jaggi allegedly diverted loans meant for funding BluSmart's electric vehicle purchases to buy a luxury apartment in DLF's The Camellias, Gurugram, and high-end golf equipment worth Rs 26 lakh, according to an interim order by markets regulator SEBI.
SEBI removed Gensol Engineering promoters Anmol Singh Jaggi and Puneet Singh Jaggi from holding any directorship post in the company and debarred the two brothers from accessing the market. In its interim order, the market regulator also asked GEL to put its recently announced stock split to a hold.
Gensol took term loans worth Rs 978 crore from IREDA and PFC between 2021 and 2024, with Rs 664 crore taken for purchasing 6,400 EVs set to be leased to BluSmart. Additionally, Gensol was set to provide an additional equity (margin) contribution of 20 percent, bringing the total expected deployment of approximately Rs 830 crore for the purchase of the EVs.
In an exchange filing released in February 2025, the company said it has procured only 4,704 EVs so far. Its EV supplier, Go-Auto, also confirmed that Gensol has bought 4,704 EVs for a total consideration of Rs 568 crore. SEBI noted that the differential amount of Rs 262.13 crore between total expected deployment of approximately Rs 830 crore and the actual EV consideration of Rs 568 crore still remain unaccounted for, although over a year has passed since the company availed the last tranche of the financing.
The market regulator's analysis showed that "once the funds were transferred from Gensol to Go-Auto, ostensibly for the purchase of EVs, they were, in most of the instances, either transferred back to the Company itself or routed to entities that were directly or indirectly related to Anmol Singh Jaggi and Puneet Singh Jaggi, promoters and directors of Gensol."
Some portions of these funds were used by the promoters for personal expenses as well, SEBI said. After receiving a tranche of the loan from IREDA in 2022, Gensol diverted major portions of the fund to Go-Auto, which then transferred the sum to Capbridge, a disclosed related party to Gensol. Capbridge then transferred Rs 42.94 crore to real-estate giant DLF.
When SEBI contacted DLF for information, it was revealed by the real estate major that the amount was paid for the purchase of an apartment in the uber-luxury project The Camellias in Gurgaon. "Funds availed by Gensol as loans for procuring EVs were, through layered transactions, partly utilised for buying a high-end apartment in The Camellias, Gurugram, in the name of a firm where the MD of Gensol and his brother are designated partners," SEBI said in its interim order, released on April 15.
Another connected entity Wellfray Solar Industries was mentioned in SEBI's order. It was one of the alleged recipients of the funds diverted by Gensol which was supposed to be used to buy EVs for BluSmart. Notably, the Jaggi brothers held key directorial positions in Wellfray earlier. Bank statements cited by SEBI showed that Gensol paid Wellfray Rs 424.14 crore, out of which Rs 382.84 crore was transferred to various other entities. Rs 246.07 crore out of this was paid to related parties of Gensol, with Anmol Singh Jaggi being paid Rs 25.76 crore and Puneet Singh Jaggi being paid Rs 13.55 crore.
SEBI further analysed the bank statements of Anmol Singh Jaggi, and found that majority of funds were transferred to other related parties, family members or utilized for personal expenses. Some notable payments made for personal use are as follows:
SEBI order noted "What has been witnessed in the present matter is a complete breakdown of internal controls and corporate governance norms in Gensol, a listed company. The promoters were running a listed public company as if it were a propriety firm. The Company’s funds were routed to related parties and used for unconnected expenses, as if the Company’s funds were promoters' piggybank." The order further noted, "The result of these transactions would mean that the diversions mentioned above would, at some time, need to be written off from the Company’s books, ultimately resulting in losses to the investors of the Company."
Gensol Engineering shares crashed 5 percent to remain locked in the lower circuit at Rs 122.68 apiece.
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