Ministry of Corporate Affairs will complete its investigation into Gensol Engineering in 3-5 months, sources told Moneycontrol on May 20.
The need to send Gensol for Serious Fraud Investigation Office (SFIO) probe may not arise if MCA gets enough evidence in investigation, government sources added.
Earlier this month, MCA had ordered a probe into the affairs of crisis-hit Gensol Engineering and BluSmart Mobility for alleged violations of companies law.
The investigation, reportedly ordered under Section 210 of the Companies Act, is expected to focus on the fund diversion allegations highlighted in the Securities and Exchange Board of India (Sebi's) interim report on Gensol in mid-April.
Under Section 210, the ministry has powers to order a probe into the affairs of a company on various grounds, including in public interest.
Earlier, the ministry had said it would take necessary action in the matter after examining the Sebi order.
Ravneet Kaur, Chairperson, Competition Commission of India added that the National Financial Reporting Authority (NFRA) has sent a notice to the auditor of Gensol Engineering after joining the probe on the crisis-hit firm.
Gensol Engineering came under regulatory scanner for alleged fund diversions and corporate governance lapses after Sebi, last month, passed an order barring the company’s promoters Anmol Singh Jaggi and Puneet Singh Jaggi from the securities market for various violations.
The order by Sebi, on April 15, came amid allegations that promoters were siphoning off loan funds from their publicly-listed company Gensol Engineering for personal use, raising concerns over corporate governance and financial misconduct.
The probe by Sebi also revealed that the funds acquired through loans on behalf of Gensol to purchase electric vehicles were partly used for buying a high-end apartment in The Camellias, DLF Gurgaon.
The investigation found that diverted funds were used for personal luxury expenses such as golf set, travel and shopping as well.
At 12:40 pm on May 20, Gensol Engineering shares were trading 2 percent lower at Rs 70.2 a piece.
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