Gensol Engineering shares in focus as NCLT likely orders asset freeze against promoters

Time of India

29-05-2025

The matter is scheduled to return to the regular NCLT bench on June 3, 2025, where further arguments and responses from the accused will be reviewed.
The National Company Law Tribunal has ordered the freezing of assets linked to Gensol Engineering and its affiliates following accusations of financial misconduct, including fund diversion and falsified records. Multiple agencies, including the MCA, SEBI, and RBI, are investigating the matter, with trading of Gensol's securities blocked and asset transactions restricted.
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Shares of Gensol Engineering are expected to be in focus on Thursday following reports that the National Company Law Tribunal ( NCLT ), Ahmedabad bench, has directed the freezing and attachment of assets linked to 37 individuals and entities associated with Gensol, including its promoters and affiliatesAccording to a report by CNBC TV-18, NCLT initiated this strong action against the company on May 28.The action stems from accusations of financial misconduct, including diversion of funds, falsification of financial records, and unauthorised sale of assets. The company is also alleged to have defaulted on substantial loan repayments while continuing to claim otherwise.The Ministry of Corporate Affairs (MCA), the Securities and Exchange Board of India ( SEBI ), the Serious Fraud Investigation Office (SFIO), the Reserve Bank of India (RBI), and the Income Tax Department are among the agencies involved in a coordinated probe into the matter, which regulators have described as one of public interest.The CNBC report suggests that the RBI and the Indian Banks' Association (IBA) have been empowered by the NCLT to freeze all bank accounts and lockers held by Gensol, its promoters, and associated entities.Additionally, all respondents are mandated to disclose their global asset holdings, including movable and immovable properties.Further, a ban has been imposed on any asset transactions by Gensol and its affiliates. This includes restrictions on mortgaging or transferring assets within or outside India. The MCA has also been authorised to work with Indian diplomatic missions overseas to enforce the tribunal's directions.Market-related restrictions have also been triggered. According to the CNBC-TV18 report, the MCA has instructed both BSE and NSE to block trading of securities held by Gensol and its promoters.In parallel, depository institutions such as CDSL and NSDL have been directed to freeze all securities under the accused entities. The Income Tax Department is expected to furnish asset details for the ongoing investigation.The tribunal has acknowledged preliminary findings indicating the alleged misuse of loans amounting to Rs 975 crore, originally allocated to Gensol's electric vehicle subsidiary. These findings were part of submissions made by the MCA, SEBI, and SFIO.The matter is scheduled to return to the regular NCLT bench on June 3, 2025, where further arguments and responses from the accused will be reviewed. Notices are being issued to all concerned parties ahead of the hearing.Also read: HDFC Bank faces regulatory scrutiny over alleged mis-selling of Credit Suisse bonds in UAE The proceedings mark one of the most high-profile corporate cases of the year and are likely to draw continued regulatory attention and market scrutiny in the days ahead.Shares of Gensol Engineering closed 2% lower at Rs 62.98 on the NSE on Wednesday.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)