Markets regulator Sebi has flagged serious governance lapses at Gensol Engineering Ltd, noting that it found "no manufacturing activity" at the company’s electric vehicle (EV) plant in Pune, with only two to three labourers present when a National Stock Exchange (NSE) official visited the site earlier this month.
These revelations were part of Sebi’s interim order dated April 15, issued in response to a complaint received in June 2024 that alleged manipulation of Gensol’s share price and misappropriation of funds by the company and its promoters, PTI reported.
In its findings, Sebi pointed to multiple discrepancies and misleading disclosures made by Gensol Engineering, a company promoted by brothers Anmol Singh Jaggi and Puneet Singh Jaggi.
According to the order, an NSE official visited Gensol Electric Vehicle Private Ltd’s plant at Chakan in Pune on April 9 and found barely any activity. “It was found that there was no manufacturing activity at the plant with only 2-3 labourers present there,” Sebi said. The NSE official also reviewed electricity bills and noted that the highest billed amount by Mahavitaran in the last 12 months was only Rs 1,57,037.01 in December 2024, indicating limited usage and reinforcing the absence of manufacturing operations. “Hence, it can be inferred that there has been no manufacturing activity at the plant site which is on a leased property,” the order said.
This site visit came after Gensol informed stock exchanges on January 28, 2025, that it had received pre-orders for 30,000 units of its newly launched EVs showcased at the Bharat Mobility Global Expo 2025. However, Sebi’s review revealed that these were only Memorandum of Understandings (MoUs) with nine entities for 29,000 vehicles. These MoUs did not mention pricing or delivery timelines. “Therefore, it prima facie appeared that the company was making misleading disclosures to investors,” Sebi said.
Another disclosure by Gensol dated January 16, 2025, had announced a strategic tie-up with Refex Green Mobility Ltd for the transfer of 2,997 EVs, with Refex set to take over an outstanding loan of Rs 315 crore. However, on March 28, the company informed the stock exchanges that the proposed takeover had been withdrawn.
On February 25, 2025, Gensol announced a non-binding term sheet for a Rs 350 crore strategic transaction involving the sale of its US subsidiary, Scorpius Trackers Inc., incorporated just months earlier on July 22, 2024. When asked by Sebi to justify the valuation, the company failed to provide any explanation or rationale.
Sebi’s probe further revealed the “mis-utilization and diversion of funds of the company 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 had secured loans amounting to Rs 977.75 crore from IREDA and PFC between FY22 and FY24. Of this, Rs 663.89 crore was specifically meant for the purchase of 6,400 EVs. However, the company admitted to buying only 4,704 vehicles, worth Rs 567.73 crore, as verified by supplier Go-Auto. Sebi said that given Gensol was supposed to provide a 20 per cent equity contribution, the total outlay should have been Rs 829.86 crore, leaving Rs 262.13 crore unaccounted for.
The regulator found that funds meant for EV purchases were instead rerouted to Gensol or entities associated with the Jaggi brothers. Some amounts were reportedly used for personal expenses, including the purchase of a luxury apartment, transfers to relatives, and investments in privately held ventures owned by the promoters.
In response to these violations, Sebi has taken stern action. The Jaggi brothers have been barred from accessing the securities market and from holding any directorial or key managerial roles in Gensol until further notice. Sebi has also directed Gensol to put on hold its proposed 1:10 stock split. Following the interim order, both Anmol and Puneet Singh Jaggi have stepped down from the company’s board.
(With inputs from PTI)
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