IREDA Files for Insolvency Against Gensol Engineering Ltd
The Indian Renewable Energy Development Agency (IREDA) has taken a significant step by filing an application with the National Company Law Tribunal (NCLT) against Gensol Engineering Ltd. This action is in relation to a default on a loan amounting to Rs 510 crore, as indicated in a regulatory submission to the Bombay Stock Exchange (BSE) on Tuesday.
Loan Default and Insolvency Proceedings
According to the regulatory filing, IREDA’s application is made under Section 7 of the Insolvency and Bankruptcy Code (IBC), marking an important move in its efforts to recover outstanding dues from the renewable energy firm based in Ahmedabad. Gensol has engaged in engineering, procurement, and construction (EPC) services related to solar power projects and has expanded into electric mobility.
Details of the Loan
Gensol Engineering Ltd has accumulated loans exceeding Rs 977 crore from IREDA and Power Finance Corporation (PFC). Out of this total, approximately Rs 664 crore was earmarked for acquiring electric vehicles for BluSmart, an electric ride-hailing service co-founded by Anmol Singh Jaggi and Puneet Singh Jaggi, who are the promoters of Gensol.
Allegations and Regulatory Actions
This initiative for insolvency follows shortly after IREDA lodged a complaint with the Economic Offences Wing (EOW), accusing Gensol of misappropriating funds and presenting fraudulent documents. Furthermore, the agency alleged that the promoters decreased their shareholding without notifying the lender.
Consequences for the Jaggi Brothers
In light of these developments, the Securities and Exchange Board of India (SEBI) has prohibited the Jaggi brothers from assuming any executive or directorial roles in publicly listed companies. Subsequently, they resigned from their positions on May 12.
Future of Gensol Engineering Ltd
Gensol, once viewed as a burgeoning contender in India’s initiative for green mobility and solar infrastructure, is now on the brink of a corporate insolvency resolution process (CIRP), pending approval from the NCLT.
Public Response Pending
As of now, Gensol Engineering Ltd has not made any public statements regarding the ongoing insolvency proceedings. The situation may have wider implications for associated entities, including BluSmart.