IREDA approaches DRT Delhi to recover about ₹729 cr from Gensol Engineering, its arm

Mint

21-05-2025

New Delhi, May 21 (PTI) State-owned Indian Renewable Energy Development Agency on Wednesday said it has approached the Debt Recovery Tribunal Delhi to recover about ₹ 729 crore from Gensol Engineering and Gensol EV Lease Pvt Ltd.
Earlier, Indian Renewable Energy Development Agency (IREDA) had filed a bankruptcy application against beleaguered Gensol Engineering as well as its electric vehicle leasing unit Gensol EV Lease Ltd.
In an exchange filing, IREDA stated that it has filed an "original application under Section 19 of The Recovery of Debts and Bankruptcy Act, 1993 before Debt Recovery Tribunal Delhi on May 20, 2025 for a default amount of ₹ 510,00,52,672 and Rs. 218.95 crore against Gensol Engineering Ltd and Gensol EV Lease Pvt Ltd respectively".
The agency on May 14 filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Gensol Engineering Limited for the default amount of ₹ 510 crore. It also filed a bankruptcy application on May 15 against Gensol EV Lease Ltd, a subsidiary of Gensol Engineering Ltd, for a default of ₹ 218.95 crore.
Last month, in an interim order, Sebi barred Gensol Engineering and promoters -- Anmol Singh Jaggi and Puneet Singh Jaggi -- from the securities markets till further orders in a fund diversion and governance lapses case.
On May 12, Jaggi brothers resigned from the company following market regulator Sebi's interim order, according to an exchange filing.
Anmol Singh Jaggi held the post of Managing Director while Puneet Singh Jaggi was a Whole-time Director.
In its order on April 15, 2025, the Sebi debarred Jaggi brothers from holding the position of a director or key managerial personnel in Gensol until further orders.
The order came after the Securities and Exchange Board of India (Sebi) received a complaint in June 2024 relating to the manipulation of share price and diversion of funds from GEL and thereafter started examining the matter.
In the 29-page order, Sebi had said, "The prima facie findings have shown mis-utilisation and diversion of funds of the company (GEL) in a fraudulent manner by its promoter directors, Anmol Singh Jaggi and Puneet Singh Jaggi, who are also the direct beneficiaries of the diverted funds".
Gensol Engineering's promoters treated the listed company as a proprietary firm, diverting corporate funds to buy a high-end apartment in The Camellias, DLF Gurgaon, splurging on a luxury golf set, paying off credit cards, and transferring money to close relatives, Sebi said in its interim order.
"The company has attempted to mislead Sebi, the CRAs (credit rating agencies), the lenders and the investors by submitting forged conduct letters purportedly issued by its lenders," the regulator had said.
The noticees 1, 2 and 3 (GEL, Anmol and Puneet Singh Jaggi) are alleged to have violated the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) rules, it had added.
Sebi had noted that the promoters were running a listed public company as if it were a proprietary firm. GEL's funds were routed to related parties and used for unconnected expenses as if the company's funds were promoters' piggy banks.
According to the regulator, the company secured a total of ₹ 977.75 crore in loans, of which ₹ 663.89 crore was meant specifically for the purchase of 6,400 electric vehicles (EVs). EVs were procured by the company and subsequently leased to BluSmart, a related party.
The result of these transactions would mean that the diversions at some time need to be written off from Gensol's books, ultimately resulting in losses to the investors of the company.
The internal controls at Gensol appear to be loose, and through the quick layering of transactions, funds have seamlessly flowed to multiple related entities/individuals, the regulator had said.
It had also directed the firm to appoint a forensic auditor to examine the books of accounts of Gensol and its related parties.