The Ministry of Corporate Affairs (MCA) has reportedly initiated an investigation into Gensol Engineering and its associated electric-vehicle ride-hailing start-up BluSmart to determine if they have engaged in corporate-governance violations, The Economic Times reported.
MCA Launches Probe into Alleged Corporate Governance Breaches at Gensol and BluSmart
The ministry will focus on ascertaining if there were any fund diversions for personal expenses of the promoters, such as purchase of a luxury apartment, transfers to relatives and investments benefiting private entities owned by the promoters, an official said
MCA Launches Probe into Alleged Corporate Governance Breaches at Gensol and BluSmart
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“Investigation under Section 210 of the Companies Act was ordered last week,” a source told ET.
Section 210 governs the inquiry into a company’s affairs. Within three months, a report summarising the findings must be submitted to the MCA. If the investigation uncovers any inconsistencies, the government may refer the case to the SFIO.
“The ministry will focus on ascertaining if there were any fund diversions for personal expenses of the promoters, such as purchase of a luxury apartment, transfers to relatives and investments benefiting private entities owned by the promoters,” an official said.
The Background
The Securities and Exchange Board of India (SEBI) barred Gensol Engineering Ltd and its promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, from trading in the securities markets. This order followed a complaint filed in June 2024 alleging share-price manipulation and fund diversion by Gensol Engineering Ltd (GEL). SEBI also suspended the company’s planned stock split due to these allegations.
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The SEBI order marks the latest setback for Gensol, following credit downgrades by rating agencies, a liquidity crisis and a cancelled deal for transferring EV assets.
“Funds availed by Gensol as loans for procuring EVs were, through layered transactions, partly utilised for buying a high-end apartment in The Camellias, DLF Gurgaon, in the name of a firm where the MD of Gensol (Anmol Singh Jaggi) and his brother are designated partners,” the SEBI order stated.
SEBI noted that in September 2022 the solar-consultancy firm secured a loan of ₹71 crore from the Indian Renewable Energy Development Agency (IREDA), which was deposited into its GEL trust-and-retention account with IREDA. The loan was intended for procuring electric vehicles. An additional ₹26 crore was transferred from an internal account, bringing the total to ₹97 crore.
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