The Ministry of Corporate Affairs (MCA) is expected to conclude its investigation into Gensol Engineering within three to five months, CNBC-TV18 reported, citing government sources.
Sources indicate that if the MCA finds sufficient evidence during its inquiry a referral to the SFIO may not be required.
The probe, initiated under Section 210 of the Companies Act, was triggered by allegations of cash diversion highlighted in an interim report by the Securities and Exchange Board of India (SEBI) last month.
“We want to gather all evidence and complete the investigation internally while the matter is still hot,” an official source said.
The MCA has been conducting due diligence on the Gensol Engineering fund-diversion issue since April through the offices of the director general and the registrar of companies. As per sources the government is examining the financial records of approximately 17 entities related to Gensol Engineering.
NFRA Probes Gensol
The National Financial Reporting Authority (NFRA) has launched a preliminary investigation into Gensol Engineering’s financial records in response to inconsistency allegations, according to Ravneet Kaur, the audit regulator’s chief.
Kaur, who also leads the competition regulator, said the investigation was initiated following a referral from SEBI. She made these remarks on the sidelines of an event on Tuesday.
This investigation expands the ongoing probe into Gensol, which began with SEBI’s report last month.
Officials noted that the NFRA inquiry will examine the role of auditors if any in the suspected inconsistency at Gensol and whether proper audit procedures were followed.
ICAI Probe
If the Institute of Chartered Accountants of India’s (ICAI) financial reporting review board determines that the financial statements of the relevant entities are not “true and fair” it may refer the matter to the ICAI’s disciplinary committee for further action against the auditors.
In April SEBI suspended Gensol’s proprietors brothers Anmol and Puneet Jaggi from participating in stock markets and ordered a forensic investigation into their listed renewable-energy company.
The capital markets regulator’s interim evaluation found that the brothers diverted funds and that the company’s governance failed. The brothers face allegations of misusing term loans obtained by Gensol from the state-run Indian Renewable Energy Development Agency (IREDA) and Power Finance Corporation (PFC).
