'Instance of greed, egregious conduct,' says SEBI's Tuhin Kanta Pandey on Gensol incident

SEBI eyes swift, exemplary action to deter misconduct that could hurt public investors.

Market regulator Securities and Exchange Board of India (SEBI) is aiming to take timely and exemplary action to deter potential miscreants.

In a recent interview to Business Standard, SEBI chairman Tuhin Kanta Pandey, highlighted how things should be made more stringent, saying, "Obviously, the regulator cannot be everywhere. We can't practically sit in every board room and run it... and that's going to be ineffective." The SEBI chief underlined that the regulator does, act promptly to punish bad actors it learns of, either from its own surveillance or based on information it receives.

"The governance standards and guardrails are in place. The board and the independent directors have to function. Material things have to be approved by the shareholder, auditors are there... if the guardrails fail because of certain fraud or greed, which is uncontained by several stakeholders, the violation should be punished, Pandey said in an interview.

He also spoke on the recent corporate misgovernance issue at Gensol Engineering, saying these are not systemic issues that require a regulatory reboot but instances of greed and egregious conduct.

SEBI is set to appoint a forensic auditor to thoroughly examine the books of accounts of Gensol Engineering and its related entities.

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 capital markets regulator on Tuesday barred Gensol Engineering and promoters -- Anmol Singh Jaggi and Puneet Singh Jaggi -- from the securities markets till further orders in the fund diversion and governance lapses case. Further, the markets watchdog directed Gensol Engineering Ltd (GEL) to put on hold the stock split announced by it.

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