New Delhi— The National Company Law Tribunal (NCLT) in Ahmedabad has ordered the freezing and attachment of all bank accounts and lockers held by Gensol Engineering Limited and its affiliated entities, following a complaint filed by the Ministry of Corporate Affairs (MCA) alleging serious financial misconduct and corporate fraud.
In a major interim relief granted to the government, the tribunal authorized the Reserve Bank of India (RBI) and the Indian Banks’ Association to take immediate steps to safeguard Gensol’s financial assets, aiming to prevent further misuse of funds or destruction of evidence. The NCLT noted that there is preliminary evidence pointing to grave irregularities by the company’s promoters.
The tribunal has issued notices to all concerned parties and scheduled the next hearing for June 3.
This action comes in the wake of separate enforcement measures by the Securities and Exchange Board of India (SEBI). On April 15, SEBI barred Gensol’s top promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, from accessing the securities market and from holding key managerial roles, citing fund diversion under a loan-backed electric vehicle (EV) financing scheme.
SEBI’s investigation found that Gensol raised ₹975 crore in loans to procure 6,400 EVs but purchased only 4,704 vehicles, spending ₹567.73 crore. Over ₹200 crore remains unaccounted for, raising suspicions of fund misappropriation.
Further compounding the company’s woes, credit rating agencies ICRA and Care Ratings downgraded Gensol’s ₹2,050 crore debt to default status in February. This included ₹1,640 crore in long-term loans and over ₹400 crore in short-term borrowings. When pressed for clarification on the downgrade, Gensol allegedly submitted forged letters from state-owned lenders IREDA and Power Finance Corporation (PFC), falsely claiming timely debt servicing. Both lenders later denied issuing such letters.
Investigations suggest that Gensol began defaulting on payments as early as December 2024, despite continuing to assure rating agencies that repayments were being made on schedule.
In light of the allegations, Gensol has been directed to delay a proposed stock split. SEBI has also mandated the appointment of a forensic auditor to conduct a comprehensive review of the company’s financial records and those of its related parties. (Source: IANS)
