23-04-2025
Gensol Engineering Under EoW Scanner After PFC Flags Loan Irregularities
PFC has lodged a formal complaint with the Economic Offences Wing (EoW) of the Delhi Police against Gensol Engineering Ltd
Power Finance Corporation Ltd (PFC), a government-owned Non-Banking Financial Company (NBFC), has lodged a formal complaint with the Economic Offences Wing (EoW) of the Delhi Police against Gensol Engineering Ltd, alleging submission of falsified documents.
In a statement issued on April 22, PFC said, 'A complaint has been filed with the Economic Offences Wing concerning the issuance of falsified documents. PFC remains committed to protecting its interests and ensuring full loan recovery, while maintaining transparency in all its operations." The company added that an internal investigation is also underway under its anti-fraud policy.
PFC clarified that it did not issue any letters to credit rating agencies CARE Ratings and ICRA, refuting claims reportedly made by Gensol. The controversy emerged when the agencies began verifying letters that allegedly originated from PFC and the Indian Renewable Energy Development Agency Ltd (IREDA), which claimed Gensol was regular in its debt servicing. These letters, later found to be forged, were used to misrepresent the company's creditworthiness.
This latest development marks the fourth ongoing investigation into Gensol and its affiliate, BluSmart Mobility. The company is already under scrutiny by the Securities and Exchange Board of India (SEBI) and the Ministry of Corporate Affairs (MCA), and the Enforcement Directorate (ED) is also expected to initiate a probe into possible money laundering.
According to PFC, it sanctioned a Rs 633 crore loan to Gensol Engineering in January 2023 as part of the government's push for electric vehicle (EV) adoption through schemes like FAME and PM E-bus Sewa. Of this, Rs 587 crore was earmarked for procuring 5,000 electric four-wheelers for lease to BluSmart Mobility, while Rs 46 crore was allocated for acquiring 1,000 electric three-wheelers for cargo operations—a portion of the loan that was never availed.
So far, Rs 352 crore has been disbursed by PFC for the procurement of 3,000 EVs, with 2,741 of those vehicles delivered and hypothecated to PFC, as verified by third-party agencies.
PFC also said it is evaluating all recovery options for the outstanding Rs 307 crore. The company noted that Gensol remained compliant with its repayment obligations until January 31, 2025. However, in the fourth quarter of FY25, PFC was forced to invoke the Debt Service Reserve Account (DSRA) to cover missed payments for February and March.
The lender has further secured its interests through pledged equity shares and non-convertible debentures (NCDs), corporate guarantees from Gensol Ventures Pvt Ltd, personal guarantees from promoters, and liquid assets including TRA and DRA balances, as well as fixed deposits from BluSmart, marked with a lien in PFC's favor.
Earlier this year, SEBI issued an interim order against Gensol Engineering and its promoters Anmol Singh Jaggi and Puneet Singh Jaggi, citing alleged fund diversion.
Shares of Gensol Engineering fell 5% on April 22 and have plunged 86% year-to-date in 2025.
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