IREDA moves Debt Recovery Tribunal Delhi to recover ₹729 crore from Gensol, subsidiary

The Indian Renewable Energy Development Agency (IREDA) has approached the Debt Recovery Tribunal (DRT Delhi to recover dues around ₹729 crore from Gensol Engineering Ltd and its electric vehicle leasing arm, Gensol EV Lease Pvt Ltd.

In a regulatory filing on Wednesday, IREDA said it has filed an “original application” with the DRT under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993, seeking to recover ₹510 crore from Gensol Engineering and ₹218.95 crore from Gensol EV Lease.

The move comes on the heels of separate insolvency proceedings initiated earlier this month by the state-run lender against the beleaguered entities.

On May 14 and 15, IREDA filed petitions under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, before the National Company Law Tribunal (NCLT), Ahmedabad, against both companies over the same defaults.

The insolvency plea against Gensol Engineering came up for hearing before a two-member NCLT bench comprising Judicial Member Shammi Khan and Technical Member Sanjeev Kumar Sharma.

The tribunal issued a notice to the company, asking it to file a reply, and scheduled the next hearing for June 3.

During the proceedings, IREDA requested the appointment of an Interim Resolution Professional (IRP) to take charge of the company as the top leadership has exited, following the order passed by the market regulator SEBI. However, the bench refused it.

The developments follow a damning interim order passed by the Securities and Exchange Board of India (Sebi) on April 15, which barred Gensol Engineering and its promoter-directors, Anmol Singh Jaggi and Puneet Singh Jaggi, from the securities market, citing serious lapses in corporate governance and fund diversion.

According to SEBI’s 29-page interim order, the Jaggi brothers diverted company funds for personal use, including the purchase of a luxury apartment, golf equipment, and credit card payments.

The market regulator also alleged that the company misled lenders and rating agencies by submitting forged documents and failed to maintain adequate internal controls.

According to SEBI, out of ₹977.75 crore in loans secured by Gensol, ₹663.89 crore was earmarked for purchasing 6,400 electric vehicles to be leased to the related party BluSmart.

The regulator had noted that the promoters were running a listed public company as if it were a proprietary firm.

GEL's funds were routed to related parties and used for unconnected expenses as if the company's funds were promoters' piggy banks.

Following the SEBI order, the Jaggi brothers resigned from their roles as Managing Director and Whole-time Director on May 12.