Corporate affairs ministry to wrap up probe into Gensol, 18 others in 3-5 months: Official

The corporate affairs ministry is aiming to complete its investigation into crisis-hit Gensol Engineering Ltd and around 18 related entities within the next three to five months, a senior official said on Tuesday.

Gensol Engineering has been facing multiple regulatory probes following allegations of fund diversion and corporate governance lapses.

The ministry is implementing the Companies Act, 2013, under which it has various powers to deal with instances of corporate misdoings.

The company, along with its promoter-directors Anmol Singh Jaggi and Puneet Singh Jaggi, was barred by SEBI on April 15 from the securities markets until further notice. The regulator also prohibited the Jaggi brothers from holding any directorial or key managerial positions in Gensol Engineering.

Following the SEBI order, both Anmol Singh Jaggi and Puneet Singh Jaggi stepped down from their roles, with their resignations taking effect from the close of business hours on May 12.

SEBI had alleged that the promoters had diverted company funds for personal gain and submitted forged documents to mislead regulatory authorities, lenders, and investors.

"The prima facie findings have shown mis-utilisation and diversion of funds of the company (GEL) in a fraudulent manner by its promoter directors... who are also the direct beneficiaries of the diverted funds," SEBI said in a 29-page interim order.

The regulator further noted that the promoters were managing the publicly listed firm like a proprietorship. 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 SEBI.

"...prima facie evidence of a blatant violation of rules of corporate governance is writ large over the workings of the company," SEBI's Whole-Time Member Ashwani Bhatia said.

The National Financial Reporting Authority (NFRA) is conducting a preliminary enquiry into the affairs of the company based on a reference from the Securities and Exchange Board of India (SEBI), NFRA chairperson Ravneet Kaur said.

Last week, the Indian Renewable Energy Development Agency (IREDA) filed a bankruptcy petition against Gensol before the National Company Law Tribunal. The company had reportedly taken loans worth ₹977.75 crore from IREDA and Power Finance Corporation, including ₹663.89 crore for the purchase of electric vehicles for ride-hailing platform BluSmart.

Meanwhile, the Institute of Chartered Accountants of India (ICAI) is also reviewing the financial statements of Gensol Engineering Ltd and BluSmart Mobility Pvt Ltd for the 2023-24 fiscal.