New Delhi, May 29 The National Company Law Tribunal (NCLT) in Ahmedabad has ordered the freezing and attachment of all bank accounts and lockers belonging to Gensol Engineering Limited and its associated entities.
The action follows a complaint filed by the Ministry of Corporate Affairs (MCA), which has accused the company of serious corporate fraud and financial misconduct.
The tribunal granted urgent interim relief to the government, allowing the Reserve Bank of India (RBI) and the Indian Banks' Association to take swift steps to secure Gensol’s financial assets.
The aim is to prevent any further misuse of funds or tampering with evidence. The NCLT also stated that there is initial proof suggesting grave misconduct by the company’s promoters.
It has ordered notices to be sent to all involved parties and scheduled the next hearing for June 3.
This development comes just weeks after the Securities and Exchange Board of India (SEBI) took strict action against Gensol’s top promoters, Anmol Singh Jaggi and Puneet Singh Jaggi.
On April 15, SEBI barred both from accessing the securities market and from holding key management roles.
The regulator’s investigation revealed that Gensol had diverted funds raised through a loan-financed electric vehicle (EV) purchase scheme.
According to SEBI, Gensol took loans worth Rs 975 crore to buy 6,400 EVs but ended up purchasing only 4,704 vehicles at a cost of Rs 567.73 crore.
Over Rs 200 crore could not be accounted for, raising red flags about possible fund misuse.
Adding to the company’s troubles, credit rating agencies ICRA and Care Ratings downgraded Gensol’s Rs 2,050 crore debt to default status in February.
This included more than Rs 1,640 crore in long-term loans and over Rs 400 crore in short-term borrowings.
When questioned about the sudden downgrade, Gensol reportedly submitted fake letters claiming they had been regular with their debt payments.
These letters were supposedly issued by state-run lenders IREDA and Power Finance Corporation (PFC), but both lenders later denied providing any such documents.
Investigations also revealed that the company began defaulting on its payments as early as December 2024, even though it continued to assure rating agencies that repayments were being made on time.
In light of these developments, Gensol has been asked to postpone a stock split it had recently announced.
SEBI has also ordered the appointment of a forensic auditor to thoroughly review the company’s financial records and those of related parties.
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