Delhi High Court banned GensoI Engineering and BluSmart Mobility from creating third-party rights over 175 electric vehicles (EVs), leased to them by Japanese financial services firm Orix, on Friday, the Mint reported. The next hearing on the matter is scheduled for May 16.
The move comes after the Japanese financial services company had moved to the court under the Arbitration and Conciliation Act. The firm sought interim measures to restrict the sale or use of the vehicles as collateral after non-payment of dues by Gensol and violation of the agreement related to the leased EVs.
Orix’s Case Against Gensol
According to Orix’s plea, the company had entered into lease agreements with both Gensol Engineering and BluSmart Mobility to promote green mobility. Around 175 EVs were leased to BluSmart, the Mint reported. Anmol Singh Jaggi, co-founder of both companies, served as guarantor for the lease obligations.
The Japan-based firm has asked the Delhi High Court to carry out the arbitration proceedings in accordance with the dispute resolution clause in the lease agreements.
More Trouble for Gensol
The plea filed by the Japanese financial services firm isn’t the only trouble surrounding Gensol. The company is also on the radar of the Securities and Exchange Board of India (Sebi). Recently, the markets regulator issued a show-cause notice to the company for governance lapses, including undisclosed related-party transactions and alleged financial irregularities. The company is facing regulatory scrutiny for allegedly mishandling around Rs 978 crore in loans from Power Finance Corporation (PFC) and Indian Renewable Energy Development Agency (Ireda) for purchasing 6,400 EVs. But the disclosures mentioned that only 4,704 vehicles were procured.
PFC has reportedly lodged a complaint with the Economic Offences Wing (EoW) of the Delhi Police, accusing Gensol of submitting falsified documents.
As the lapses came to light, Sebi banned the Jaggi brothers from holding any key managerial positions in any listed company. Additionally, the regulator also restricted Gensol and its promoters from accessing capital markets.
