MCA launches suo motu probe into Gensol Electric, firm’s regulatory filings will be examined: Sources
The Ministry of Corporate Affairs (MCA) has initiated a suo motu inquiry into Gensol Electric, sources told Business Today TV on Sunday. The ministry is looking into wrongdoings at Gensol Electric, sources said, adding that a suo moto inquiry has been initiated and the company’s regulatory filings and accounts will be examined. Any action against the company will be based on the findings of the inquiry, the sources added. No timeline has been fixed for the inquiry as yet.
The development comes on the heels of an interim order passed by the Securities and Exchange Board of India (Sebi) that barred Gensol promoters Anmol Singh Jaggi and Puneet Singh Jaggi from participating in the securities market and from holding any position as directors or key managerial personnel in any listed company.
Sebi launched the action after receiving complaints of share price manipulation and loan defaults. The regulator’s investigation found widespread misuse of company funds and severe lapses in financial controls. “The promoters were running a listed public company as if it were a propriety firm,” Sebi said in its interim order.
“The prima facie findings have shown mis-utilisation and diversion of funds of the Company in a fraudulent manner by its promoter directors, Anmol Singh Jaggi and Puneet Singh Jaggi, who are also the direct beneficiaries of the diverted funds,” the order added.
According to Sebi, Gensol took loans amounting to Rs 975 crore from institutions including Indian Renewable Energy Development Agency (IREDA) and Power Finance Corporation (PFC) to purchase electric vehicles. However, only a fraction of the funds were used for the stated purpose.
More than Rs 200 crore was routed through a car dealership and then transferred to entities linked to the promoters. Sebi’s findings indicate some of these funds were used for personal purchases, including expensive real estate. The promoters, Sebi said, “treated the company’s funds like their own piggy bank,” directing money to related parties and for non-business activities.
These fund diversions may have to be written off the company’s books, causing potential losses to shareholders. In addition, Sebi uncovered the submission of fake documents to credit rating agencies aimed at falsely showing timely loan repayments. The regulator noted that even ring-fenced loans—meant strictly for specific business purposes—were redirected arbitrarily. The investigation highlighted the lack of robust internal systems at Gensol.
Gensol Engineering operates in the renewable energy space, primarily focusing on solar EPC (engineering, procurement, and construction) projects. In recent years, it has also forayed into electric vehicle leasing.
While the company has reported strong growth — scaling revenue from Rs 61 crore in FY17 to Rs 1,152 crore in FY24, with net profit rising from Rs 2 crore to Rs 80 crore — Sebi observed that promoter shareholding fell from 70.72% in FY20 to 35% in FY25. This sharp decline in ownership was flagged as a concern during the probe.
