Market regulator Securities and Exchange Board of India (SEBI) has barred Gensol Engineering Limited (GEL) promoters Anmol Singh Jaggi and Puneet Singh Jaggi from holding any directorial position in the company.
The regulator has debarred the two brothers from accessing the market.
In its interim order, SEBI explained how loans taken for buying new EVs for BluSmart were diverted by the duo for personal use, including the purchase of a luxury apartment in Gurgaon.
It detailed various instances of fund diversion, including how Gensol raised money to procure electric vehicles (EVs). The order lists that Jaggi transferred Rs 6 crore to his mother, Rs 2 crore to his wife, and Rs 50 lakh to Grover’s Third Unicorn.
Notably, Gensol took term loans worth Rs 978 crore from IREDA and PFC between 2021 and 2024, with Rs 664 crore allocated for the purchase of 6,400 EVs set to be leased to BluSmart.
Gensol was set to provide an additional equity (margin) contribution of 20%, bringing the total expected deployment for the purchase of EVs to approximately Rs 830 crore.
SEBI said there is a complete breakdown of internal controls and corporate governance norms at Gensol, despite its status as a listed company. “The promoters were running a listed public company as if it were a proprietary firm,” the order stated.
It has temporarily banned the promoters from acting as directors or key managerial personnel, and prohibited Gensol and other entities from trading in the securities market until further notice.
SEBI, in its analysis, showed that “once the funds were transferred from Gensol to Go Auto, ostensibly for the purchase of EVs, they were, in most of the instances, either transferred back to the company itself or routed to entities that were directly or indirectly related to Anmol Singh Jaggi and Puneet Singh Jaggi, promoters and directors of Gensol.”
Some portions of these funds were used by the promoters for personal expenses as well, SEBI said.
After receiving a tranche of the loan from IREDA in 2022, Gensol diverted major portions of the fund to Go Auto, which then transferred the sum to Capbridge, a disclosed related party of Gensol. Capbridge then transferred Rs 42.94 crore to real estate giant DLF.