Shares of Gensol Engineering were stuck in the lower circuit following the interim order passed by Securities and Exchange Board of India against its promoters barring them from the markets and holding key managerial positions in the company.
The company’s shares closed at ₹123.65 on the BSE, having fallen steeply from the over ₹770-levels seen in January. The stock had hit a 52-week high of ₹1,125.75 in June last year and had a market capitalisation of ₹4,300 crore. Now, its market cap has shrunk to ₹470 crore.
On Tuesday, SEBI came out with a detailed order in which it described how the founders, Anmol Jaggi and Puneet Jaggi, had diverted loans they had taken to buy electric vehicles, for their own personal use, including an expensive apartment in a luxury project in Gurgaon. The EVs purchased by them were to be leased to related party BluSmart, a ride hailing service operating in Bengaluru and Delhi-NCR.
Loan defaults
Gensol had taken loans from Indian Renewable Energy Development Agency and Power Finance Corporation and had defaulted in making timely payments of the instalments. The SEBI order also noted that the letters of conduct that was provided by Gensol, ostensibly written by the lenders assuring timely repayment of dues, was denied by both IREDA and PFC.
“It is a clear case of fraud and forgery, and a police complaint should be filed,” said Shriram Subramanian, Founder and MD of proxy advisory firm InGovern Research Services.
He added that SEBI and the Ministry of Corporate Affairs should exercise their power to supersede the board of the company and appoint professionals to run it. “The forging of conduct letters purportedly issued by IREDA and PFC, if established, amounts to a grave criminal offence under Indian law,” said Sonam Chandwani, Managing Partner KS Legal & Associates.
Both IREDA and PFC did not respond to emails sent by businessline seeking a response to the developments.
Gensol clarification
In a statement to the exchanges, Gensol Engineering said while the SEBI proceedings and associated media coverage had affected investor sentiment, “We remain focused on our business objectives and are working diligently to maintain operational stability and performance.”
It added that following SEBI’s interim order, the promoters were no longer participating in the management of the company. It said it was committed to providing the forensic auditor, that SEBI intended to appoint, “with complete access to records and information to ensure a transparent and comprehensive audit process.”
Ironically, it added, “the company is dedicated to upholding the highest standards of corporate governance and transparency. We will continue to keep the exchanges promptly informed of any further developments on this matter or any other material events in the future, in line with our regulatory obligations.”
In its order, SEBI had said, “In the instant case, prima facie evidence of blatant violation of rules of corporate governance is writ large over the workings of the company.”
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Published on April 16, 2025
