Mumbai, May 7 The Securities Appellate Tribunal on Wednesday rejected an appeal by Gensol Engineering Ltd to stay a SEBI interim order barring it and its promoters Anmol Singh Jaggi and Puneet Singh Jaggi over the issue of fund diversion and governance concerns.
The bench of the appellate tribunal comprising Justice P.S. Dinesh Kumar and technical member Meera Swarup have given the company two weeks to reply to the Securities and Exchange Board of India (SEBI) on the temporary ex-parte order and directed the markets regulator to give a final order in Gensol's case within four weeks.
On April 15, the SEBI released a detailed interim order showing what went wrong at Gensol. The order said the promoters of Gensol, including the Jaggi brothers, had treated the company like their personal 'piggy bank'. There were no proper financial controls in place, and the promoters had diverted loan money to themselves or related entities.
Gensol had secured loans amounting to Rs 977.75 crore from the Indian Renewable Energy Development Agency Ltd (IREDA) and the Power Finance Corporation (PFC) Ltd between FY22 and FY24. Of this, Rs 663.89 crore was specifically meant for the purchase of 6,400 EVs. However, the company admitted to buying only 4,704 vehicles, worth Rs 567.73 crore, as verified by supplier Go-Auto.
The SEBI investigation report also states that it found "no manufacturing activity" at Gensol Engineering Ltd’s electric vehicle (EV) plant in Pune, with only two to three labourers present at the site, which itself was a leased property.
Gensol, the parent company of all-electric vehicle (EV) app BluSmart, which was providing green cab services, allegedly forged letters from its two lenders - the PFC and the IREDA - to show that it was servicing its debt regularly. However, the claim was exposed when the credit rating agencies began verifying the letters with the lenders.
Meanwhile, government-owned PFC has filed a complaint with the Delhi Police against Gensol Engineering Ltd for allegedly filing false documents to take loans for buying electric vehicles.
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