Gensol Woes Deepen: More Directors Quit, Shares Plunge 90%

Gensol Engineering finds itself in deeper waters as two more independent directors stepped down, adding to the growing crisis engulfing the company. This was followed by the Securities and Exchange Board of India's (Sebi) allegation against Gensol co-founders over their involvement in misusing company funds.

The company said in an exchange filing on Thursday that its two independent directors, Harsh Singh and Kuljit Singh Popli, have tendered their resignations with immediate effect, as per Business Standard. Earlier this week, another independent director, Arun Menon, also stepped down from his designation.

There was growing concerns on the leveraging of GEL balance sheet to fund the capex of other businesses; and the sustainability of servicing such high debt costs by GEL,” Menon’s resignation letter read, as per media reports.

Gensol Crisis

The turmoil intensified after the Securities and Exchange Board of India (Sebi) levelled serious allegations against Gensol’s co-founders, Anmol Jaggi and his brother Puneet. The market watchdog has accused them of siphoning off funds meant for the company’s electric vehicle (EV) business to finance personal luxuries, including the purchase of a high-end apartment and other family-related expenses.

Jaggi brothers are now prohibited from taking part in the securities market, holding any directorial or key managerial positions or trading in listed securities. Sebi further ordered a forensic audit of Gensol’s operations, pointing to what it described as a “complete breakdown” of governance and internal controls. The regulator has also alleged that the company’s promoters misused public funds for personal gain, likening it to treating the company as a “personal piggy bank.”

Anmol Jaggi, who is also the co-founder of cab ride-hailing firm BluSmart, is at the epicentre of controversy. On Thursday, the cab company also halted its services through its apps. It has also extended the refund timeline for user wallet balances to 90 days if services do not resume within the time limit.

The controversy has also hit Gensol investors' confidence adversely. Shares of Gensol Engineering plummeted another 5% on Thursday, hitting the lower circuit and plunging to a fresh 52-week low of Rs 116.54. The stock has now slid 90% from its all-time peak.