IREDA moves bankruptcy application against scam-riddled Gensol Engineering

In a major development to the financial scam involving Gensol Engineering, lender Indian Renewable Energy Development Agency (IREDA) said it filed a bankruptcy application before the National Company Law Tribunal (NCLT) against Gensol.

IREDA's May 14 filing against Gensol lists a default of around ₹510 crore—₹5,10,00,52,672, to be exact.

In April, THE WEEK reported how the Securities and Exchange Board of India (SEBI) uncovered grave misappropriation of company funds and loans involving promoters of Gensol, the Jaggi brothers, leading to EV taxi company BluSmart shutting primary operations.

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The market watchdog then slapped an interim order on Gensol alleging that its promoter directors—Anmol Singh Jaggi and Puneet Singh Jaggi—misused and diverted funds of the company "in a fraudulent manner".

In the scathing order, SEBI stated that the Jaggi brothers became "direct beneficiaries" of the diverted funds and that Gensol tried to "mislead SEBI, the CRAs, the lenders and the investors by submitting forged Conduct Letters purportedly issued by its lenders."

Gensol's company funds were rerouted to "related parties" and used for "unconnected expenses", SEBI had then said, alleging that the Jaggi brothers used it as their personal "piggybank".

On May 12, both the Jaggi siblings resigned, as per a stock exchange filing. SEBI had also, in its interim order, stated to bar Gensol and its promoters from the securities market. Gensol said in a statement that the Securities Appellate Tribunal (SAT) disposed of its appeal but allowed it to file a response to the SEBI's interim order.

The market watchdog's 29-pager order also uncovered that a part of the diverted funds from Gensol were also routed to purchase a high-end apartment in The Camellias, DLF Gurgaon under the name of a "firm where the MD of Gensol and his brother are designated partners."

Ever since the SEBI findings became public, Gensol Engineering share price more than halved. However, it began improving on May 14 by at least 5 per cent to cross into ₹60 levels. All focus would be on the stock today after the IREDA application.

 

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