SEBI will now appoint a forensic auditor to examine the books of accounts of Gensol and its related parties.
| Photo Credit:
PRIYANSHU SINGH

State-run lending agencies PFC and Indian Renewable Energy Development Agency (IREDA) are considering legal options including moving the Debt Recovery Tribunal (DRT) and the Insolvency & Banking Code (IBC) over the alleged fund diversion at the crisis-hit Gensol Engineering.

A decision on the next course of action is expected before the end of April.

Sources said that initial discussions are on analysing the issue from a criminal angle for which talks are to move the Economic Offences Wing (EoW) and Serious Frauds Investigation Office (SFIO). There are concerns over loan default by BluSmart, which is a related party to Gensol. Fund diversion is also there.

inspection of books

Under the Companies Act, the Registrar of Companies (RoC) can inspect Gensol Engineering’s books. If the RoC finds “large instances of financial misappropriation”, it can ask the SFIO to probe the firm.

Gensol was given ₹977.75 crore from IREDA and PFC as term loans, of which ₹663.89 crore was for purchasing 6,400 EVs. However, it procured only 4,704 EVs.

“Another is looking at recovering money, first. The idea is to move the DRT. Insolvency proceedings are also being contemplated, but this should be the last resort as National Company Law Tribunal (NCLT) will supersede all other recovery measures,” said one of the sources.

The government is reviewing the loan default and fund diversion issue, particularly the negative impact by the controversy on India’s start-up and clean energy sectors.

Sources said the concern in the government is that BluSmart is a successful start-up and the only all EV cab service in the country, a unique proposition for energy transition, particularly in the hard-to-abate public transport sector. The intent is to ensure that it does not lose its value due to the current controversy.

SEBI will now appoint a forensic auditor to examine the books of accounts of Gensol and its related parties. Besides, the appointed firm or forensic auditor will submit the report within six months from its appointment.

The capital markets regulator, through an interim order last week, barred Anmol Singh Jaggi and Puneet Singh Jaggi, BluSmart Co-founders, from accessing the securities market.

Published on April 21, 2025