Gensol Engineering shares hit 2% lower circuit on June 13 after the Ahmedabad bench of the National Company Law Tribunal admitted a petition by Indian Renewable Energy Development Agency Ltd. to start insolvency proceedings against Gensol Engineering Ltd.
The tribunal has also directed for the appointment of interim resolution professional (IRP) to take over the management and operations of Gensol Engineering.
At 1:25 pm on June 13, Gensol Engineering shares were trading 2% lower at Rs 49.38 apiece.
IREDA has filed an application on May 14, 2025, under Section 7 of the Insolvency and Bankruptcy Code, 2016 against Gensol Engineering Limited, a listed company bearing an amount of default of Rs 510,00,52,672 (about Rs 510 crore).
In April, 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.
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.
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