Gensol Engineering Limited has approached Securities Appellate Tribunal (SAT) against April 15 interim order of SEBI. The company had filed the appeal on Friday, which will come up for hearing today. As per sources, the appeal has been filed on behalf of company praying for removal of restrictions by SEBI.
In its interim order, SEBI had barred the company's promoters Anmol Singh Jaggi and Puneet Singh Jaggi from accessing securities market until further orders. Jaggi brothers were also restrained from holding the position of a director or a Key Managerial Personnel in Gensol until further orders. SEBI has alleged misutilisation of loans availed by Gensol Engineering Ltd (GEL) from PSU NBFCs, IREDA and PFC and diversion of these funds for personal expenses of promoters. These expenses include buying a high-end apartment in Gurgaon, purchasing luxury golf set and transferring the funds to relatives, amounting to serious lapses in corporate governance.
According to SEBI interim order, Gensol Engineering secured a total of Rs 977.75-crore loans from IREDA and PFC for buying electrical vehicles. Of the said loan amount, Rs 663.89 Cr was meant for the purchase of 6,400 EVs. But the company purchased only 4704 EVs and leased to related company BluSmart. SEBI also confirmed the same from the EV supplier Go-Auto Private limited, Gensol had paid a total amount of Rs Rs 567.73 crore to the supplier. The SEBI order noted that Gensol was also to provide additional equity (margin) contribution of 20%, bringing the total expected deployment of approximately Rs 829.86 crore for the purchase of 6,400 electric vehicles. Based on these figures, an amount of Rs. 262.13 crore remains unaccounted.
SEBI's whole-time member Ashwani Bhatia noted in interim order, “The Company’s funds were routed to related parties and used for unconnected expenses, as if the Company’s funds were promoters’ piggybank”.
SEBI has asked company to put its stock split announced on hold. Also, the regulator has sought appointment of forensic auditor to examine the books of accounts of Gensol Engineering and its related companies within six months from the appointment.
Post-SEBI interim order, ED is investigating forex rules violation under FEMA and Ministry of Corporate Affairs has also ordered investigation of the books of accounts of the company and related entities.
Moneycontrol had reported on April 4 that SEBI is likely to investigate the affairs of the company after rating agencies downgrade and allegations of falsified document submission.
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