Promoters Ran Gensol 'Like a Propriety Firm': SEBI Halts Stock Split Amid Probe

The Securities and Exchange Board of India Tuesday directed Gensol Engineering to put its recently announced 1:10 stock split on hold, as prima facie findings showed inconsistencies by its promoter directors, Anmol Singh Jaggi and Puneet Singh Jaggi. The said promoters were also the direct beneficiaries of the diverted funds, the market regulator said in its order.

The company’s promoters benefited from the funds through layered transactions and the company failed to disclose such transactions, which were qualified to be related party transactions, according to the order issued by SEBI. “The Company’s funds were routed to related parties and used for unconnected expenses, as if the Company’s funds were promoters’ piggybank,” SEBI said.

SEBI has appointed a forensic auditor to examine the books of the construction engineering company. The company had availed Rs 663.89 crore in loan from Indian Renewable Energy Development Authority and Power Finance Corporation, along with a 20% equity contribution for purchasing 6,400 electric vehicles. However, out of the Rs 829.86 deployed capital, Rs 262.13 crore remained unaccounted, SEBI said.

Some of the funds were used for purposes other than purchasing electric vehicles, SEBI said, adding that they were used to cover personal expenses of the promoter, including buying real estate. The properties bought were in the name of a firm that has Gensol’s Managing Director Anmol and his brother as designated partners.

The matter has unfolded into a dramatic sequence, where now many connected entities have been found in dirt. Gensol and its promoters have funded Wellray Solar Industries Pvt. Ltd., a connected entity, to trade in Gensol’s scrip. Wellray predominately traded in the scrip of Gensol between April 2022 and December 2024. Out of the Rs 137.57 crore cumulatively transferred by Wellray to the stockbroker Sharekhan till March 2024, Rs 101.35 crore was received from Gensol and its related parties, SEBI said.

Lalit Solanki, who was employed as regulatory affairs manager at the Gensol group until 2018, holds the entire stake in Wellray and a large part of its revenue comes from Gensol, according to the SEBI. It was also found that Gensol had provided funds to Gensol Ventures Pvt. Ltd., a promoter of Gensol, to subscribe to 97,445 equity shares of Gensol.

In a separate investigation conducted by the National Stock Exchange, it was found that there has been no manufacturing activity at the plant site, designated for manufacturing its newly launched electric vehicles that the company unveiled at the Bharat Mobility Global Expo 2025. Gensol had earlier informed the exchanges that it had received pre-orders for 30,000 units of the said vehicles.

“The promoters were running a listed public company as if it were a propriety firm,” SEBI came down heavily on the company and its promoters. The promoter holding in the company has already come down substantially and there is a risk of further off-loading by them, the regulator cautioned.