Gensol Engineering Limited’s Promoters in Scandal Over Fund Misuse

Gensol Engineering Limited finds itself at the centre of a controversy as the Securities and Exchange Board of India (SEBI) has implemented strict measures against its promoters, Anmol Singh Jaggi and Puneet Singh Jaggi. The action includes their removal from all directorial positions within the firm and a prohibition from participating in the securities market.

According to SEBI’s interim order issued on April 15, 2025, the Jaggi brothers misappropriated substantial amounts of money from Gensol’s funds—borrowed for acquiring electric vehicles intended for their subsidiary BluSmart—for personal expenses and related-party benefits. This includes acquisitions of a luxury apartment in Gurgaon, golf equipment, currency exchange, and travel expenditures.

Financial Misconduct Revealed

Gensol Engineering Limited secured Rs 977.75 crore in term loans from government-supported lenders IREDA and PFC to buy 6,400 electric vehicles (EVs). However, only 4,704 EVs were actually purchased at a cost of Rs 567.73 crore. SEBI’s forensic investigation uncovered that Rs 262.13 crore lacks proper accounting, while Rs 207.27 crore was transferred to vendor Go-Auto but not used for vehicle purchases.

In a troubling pattern, substantial portions of these funds were redirected back from Go-Auto to companies associated with the Jaggi brothers. For instance, Rs 50 crore was channelled through Capbridge Ventures LLP—where both brothers are listed as partners—to buy a luxury flat at DLF Camellias in Gurgaon. The transaction’s complexity, layered through numerous accounts, highlights a conscious attempt to obscure the genuine purpose of the funds.

Further Misallocation of Resources

The misuse of funds continued with related company Wellray Solar, linked closely to the promoters, receiving over Rs 424 crore from Gensol between FY23 and FY24, despite lack of significant operational integrity. Out of this amount, Rs 246 crore was then further distributed to companies and individuals with ties to the promoters. Anmol and Puneet Singh Jaggi individually received Rs 25.76 crore and Rs 13.55 crore respectively, which were spent on luxury items, overseas currency purchases, premium consumer products, credit card payments, and remittances to family members.

Allegations of Fraudulent Activities

SEBI’s investigation also uncovered that Gensol had manipulated debt servicing records submitted to credit rating agencies, including CARE and ICRA, to uphold its ratings. Documents purportedly issued by lenders IREDA and PFC were found to be forged. The firm failed to report prolonged defaults that extended beyond 30 days—violating SEBI’s disclosure regulations.

The investigation revealed that Wellray, financed by Gensol and its subsidiaries, was engaged in significant trading of Gensol’s own shares—conducting transactions worth over Rs 338 crore—raising alarming questions regarding stock price manipulation. In fact, 99% of Wellray’s trading volume between April 2022 and December 2024 pertained to Gensol stock.

Regulatory Measures Enforced

SEBI’s order has prevented Anmol and Puneet Singh Jaggi from holding any directorial or Key Managerial Personnel roles at Gensol Engineering Limited and has halted all trading operations for them and the firm. In addition, the regulator has paused a planned stock split and assigned a forensic auditor to conduct further investigations.

SEBI noted that Gensol operated as if it were a promoter-owned entity, ignoring fundamental norms of corporate governance and fiduciary duties. The order remarked that the funds of the Company were diverted to related parties and utilised for unrelated expenses, as though the Company’s resources were private assets of the promoters.

This situation marks one of the most significant instances of alleged corporate misconduct in recent history, emphasising the urgent requirement for enhanced scrutiny of fund usage and promoter behaviour within India’s public markets.