The Ahmedabad bench of the National Company Law Tribunal (NCLT) has admitted to corporate insolvency proceedings against Gensol Engineering, following a petition by the Indian Renewable Energy Development Agency (Ireda), according to a report by Bar and Bench.
This action came in response to loan defaults totalling ₹510 crore. The order was passed by Shammi Khan (judicial member) and Sanjeev Kumar Sharma (technical member) under Section 7 of the Insolvency and Bankruptcy Code (IBC). An interim resolution professional (IRP) has been appointed to assume control of Gensol’s operations.
While pressing for urgent oversight, Ireda argued that Gensol had effectively become “headless” after its top leadership exited amid ongoing financial and regulatory issues. “…directors have walked out and the company has projects worth crores of rupees. Somebody needs to manage the show,” Ireda’s counsel had earlier told the tribunal.
The plea also alleged a “complete breakdown of internal controls and corporate governance norms” at the publicly listed renewable energy firm. It also accused its promoters of treating the company as “if it were their proprietary firm”.
Gensol's Assets Freeze
In May, the tribunal has also directed a freeze and attachment of all bank accounts and lockers belonging to Gensol Engineering and its connected entities.
The order was issued after the Ministry of Corporate Affairs (MCA) petitioned for urgent interim relief to enable the Reserve Bank of India (RBI) and the Indian Banks’ Association (IBA) to take swift action to protect the financial assets of Gensol and 37 associated parties and individuals.
Multiple agencies including the MCA, SEBI, SFIO, RBI, and the Income Tax Department, are actively participating in the ongoing investigation.
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).
