Gensol Founders Anmol & Puneet Singh Jaggi Step Down in a Surprise Move

Almost a month after market regulator SEBI prohibited them from holding important roles within the firm, Gensol Engineering Ltd said on May 12 that Anmol Singh Jaggi, the managing director, and Puneet Singh Jaggi, the full-time director, had resigned.

 In his letter of resignation, Anmol Jaggi stated that he would be leaving his position as Managing Director of Gensol Engineering Limited effective May 12, 2025, at the end of business hours. Additionally, he announced his resignation in response to the directive issued under the SEBI Interim Order on April 15, 2025.

He would want to use this occasion to express his gratitude to the whole Board, the Management Team, and the Company's workers for their cooperation and support throughout his tenure.

SEBI Putting a Tight Scanner on the Firm

Gensol Engineering Limited filed a challenge against the April 15 SEBI judgement, but the Securities Appellate Tribunal did not provide any relief last week. Sebi implemented several strict actions as a result of governance failures, including banning Gensol and its promoters, the Jaggi brothers, from using the securities market until further notice.

The Jaggi brothers were also prohibited from holding any important management or directorship positions inside Gensol. Between FY22 and FY24, Gensol obtained INR 977.75 crore in loans from PFC and IREDA. INR 663.89 crore of the loan was intended to buy 6,400 EVs. However, according to supplier Go-Auto, Gensol acknowledged purchasing just 4,704 EVs for INR 567.73 crore.

Since Gensol was also expected to provide 20% of the equity, the total expenditure should have been INR 829.86 crore, leaving INR 262.13 crore unaccounted for.

Legal Argument Between Sebi and Gensol

Gensol contended at the SAT hearing that the Sebi order was issued without a hearing and claimed that this resulted in a "tremendous loss of business". The business claimed that its activities were in danger of contract cancellations and possible loan defaults as a result of the freeze on its demat account and the continuing forensic audit.

Sebi retorted that Gensol had deceived investors, lenders, and regulators by forging payback certificates on state-run banks' letterheads. Ireda and PFC, who have both filed complaints with the Economic Offences Wing disputing that they ever issued any such certificates, backed up these accusations.

An investigation into Gensol and BluSmart Mobility has also been launched by the Ministry of Corporate Affairs.

Inappropriate Usage of Funds

According to the Sebi investigation, money intended for EV purchases was frequently diverted back to Gensol or organisations connected to the Jaggi brothers.

A portion of the money went towards the promoters' personal needs, including buying a fancy flat, giving money to close family members, and making investments in their own private companies.

According to officials, the corporate affairs ministry has mandated an investigation into the suspected violations of companies law by Gensol Engineering and BluSmart Mobility, two companies that are currently facing a crisis.

 In the meantime, it is anticipated that the Institute of Chartered Accountants of India (ICAI) would finish reviewing Gensol Engineering Ltd's and BluSmart Mobility's financial accounts within six months. The two companies' financial statements for the fiscal year 2023–2024 are being examined by ICAI's Financial Reporting Review Board (FRRB).