Power Finance Corporation files plaint with EOW over 'document fraud'
Power Finance Corporation
has filed a complaint with the
Economic Offences Wing
concerning the alleged issuance of falsified documents by
Gensol Engineering
on delays in debt servicing.
CARE Ratings
and
ICRA
had downgraded the company's long-term loans to default following "ongoing delays in servicing of term loan obligations" along with pending over dues and special mention account (SMA') classification of the loan.
"Regarding communications from credit rating agencies CARE and ICRA on the falsified documents, PFC clarified that it did not issue the letters they referred to," the lender said in a statement.
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PFC is pursuing further actions in the case and exploring all possible options.
"Considering these red flags, the matter is under investigation internally in PFC under PFC's Anti-Fraud Policy," the company said.
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The non-banking financial company had sanctioned ₹ 633 crore to
Gensol Engineering
in January 2023. The funding was earmarked to buy 6,000 electric vehicles (EVs), of which, ₹587crore was for 5,000 four-wheelers for lease to BluSmart Mobility's ride-hailing service.
The rest was to procure 1,000 electric three-wheelers for cargo operations. However, the three-wheeler loan was not availed, the company said.
Out of the loan sanctioned for four-wheeler vehicles, PFC disbursed ₹352 crore to Gensol for the leasing of 3,000 EVs to BluSmart Mobility.
The lender said that as on date, 2,741 vehicles were delivered and hypothecated to PFC confirmed by third-party agencies.
Additionally, PFC also has Gensol Engineering's pledged equity shares and non-convertible debentures, a corporate guarantee from Gensol Ventures Private Ltd, besides personal guarantees from the promoters.
Apart from the guarantees, liquid assets in the form of trust retention account (TRA) balances, debt service reserve account (DSRA) balances, and fixed deposit by BluSmart with a lien marked to PFC are in place, the lender said.
Repayments on the disbursed amount had started with ₹45 crore repaid, leaving a principal outstanding of Rs 307 crore as of April 18. Until January 31, Gensol was servicing its dues regularly. In the last quarter of the financial year, PFC invoked the Debt Service Reserve Account to clear February and March dues.
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