ED Registers Case Against Gensol, Searches Multiple Premises Linked To Jaggi Brothers

The Enforcement Directorate on Thursday carried out searches at multiple premises linked to the promoters of fraud-hit Gensol Engineering Ltd. in Delhi, Gurugram and Ahmedabad.

A case under the Foreign Exchange Management Act has been registered, an ED official said.

Earlier, news agency PTI reported, citing sources, that the company's promoter Puneet Singh Jaggi has been taken into custody under the FEMA case. However, an ED director director denied the reports of arrest or detention.

The agency is recording the statements of Jaggi in Delhi. FEMA is a civil law, and arrest under the case takes place only after criminal charges are proven, the official said.

Jaggi, along with promoter brother Anmol Singh Jaggi, is under the scanner of the federal probe agency following a SEBI report against them for alleged financial misconduct and diversion of funds.

The Securities and Exchange Board of India, in an interim order issued on April, barred the Jaggi brothers from the securities market and restrained them from holding any key managerial position in Gensol.

The market regulator, citing its investigation, claimed that the company's funds were diverted to buy luxury property and pay for personal expenses of promoters.

The investigation majorly revolves around Rs 975 crore in loans raised by Gensol to purchase 6,400 electric vehicles , of which only 4,704 EVs were actually procured for Rs 567.73 crore. This left over Rs 200 crore unaccounted.

Notably, Gensol had obtained loans over Rs 977 crore in term loans from Power Finance Corp. and Indian Renewable Energy Development Agency Ltd. for the procurement of EVs.

However, only 4,707 vehicles were bought and leased to BluSmart, an EV cab operator linked to the promoters. This left more than Rs 262 crore unaccounted for over a span of one year, as per the SEBI order.

The market watchdog said funds were transferred from Gensol to Go Auto Pvt Ltd for EV purchases but were subsequently routed back or diverted to other entities linked to the Jaggi brothers. These funds were then used for personal expenditures, it claimed.

In one instance, Rs 93.88 crore from an IREDA loan was transferred to Go Auto. Of this, Rs 50 crore was moved to Capbridge Ventures LLP and later used to purchase a luxury apartment in DLF Camellias worth over Rs 42 crore, as per SEBI.

In another case, Go Auto sent Rs 40 crore to Wellray Solar Industries Pvt Ltd, which later transferred funds to four other entities, it added.