SEBI takes action against Gensol promoters for fund misuse

SEBI has removed Anmol Singh Jaggi and Puneet Singh Jaggi, the promoters of Gensol Engineering Limited (GEL), from holding any directorial positions in the company and has barred them from accessing the securities market. In its interim order, the market regulator outlined how loans meant for purchasing new electric vehicles (EVs) for BluSmart were diverted by the duo for personal use, including the purchase of a luxury apartment in Gurgaon.

Between 2021 and 2024, Gensol secured term loans amounting to Rs 978 crore from IREDA and PFC, with Rs 664 crore allocated for the purchase of 6,400 EVs to be leased to BluSmart. Gensol was also expected to contribute an additional 20% equity (margin), bringing the total expected investment to approximately Rs 830 crore for the EVs.

However, in a February 2025 filing, the company stated that it had only procured 4,704 EVs to date. Go-Auto, the supplier of the EVs, also confirmed that Gensol had purchased 4,704 vehicles for Rs 568 crore. SEBI noted that a difference of Rs 262.13 crore still remains unaccounted for, the gap between the total anticipated investment of Rs 830 crore and the actual purchase cost of Rs 568 crore. Over a year had passed since the company received its last tranche of financing, yet this discrepancy was unexplained.

SEBI's investigation revealed that after the funds were transferred from Gensol to Go-Auto for the EV purchases, they were often routed back to Gensol or transferred to entities linked to the two promoters, Anmol Singh Jaggi and Puneet Singh Jaggi. The market regulator also found that some of these funds were used for the promoters' personal expenses. For example, after Gensol received a loan tranche from IREDA in 2022, a large portion of the funds was sent to Go-Auto, which then transferred the amount to Capbridge, a related party of Gensol. Capbridge subsequently transferred Rs 42.94 crore to real-estate giant DLF.