Gensol Modus Operandi Explained — How Round-Tripping Fooled Investors

A luxury flat in Gurugram, an ultra-expensive golf set, luxury purchases from Titan and large fund transfers to family members were some of the ways in which Gensol management roundtripped funds, according to India's market regulator.

A quick recap of what has happened first. The Securities and Exchange Board of India (SEBI) on Tuesday barred Gensol Engineering and its promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, from accessing the securities market. SEBI also halted the proposed stock split and directed the appointment of a forensic auditor to review the company’s books. The order outlines instances of document fabrication and large-scale diversion of term loans sanctioned for electric vehicle procurement.

The Jaggi brothers spent the diverted funds on a variety of things, accroding to SEBI. These expenses included purchasing a DLF Camellias flat in Gurugram worth over Rs 42 crore, buying luxury goods from Titan worth approximately Rs 17 lakh and a golf set worth Rs 26 lakh.

Other than these expenses, money was spent towards personal use. These expenses were via ICICI Securities and making ICICI credit card payments worth almost Rs 10 lakh. Another Rs 1.86 crore were spent on purchasing foreign currency ostensibly.

Moreover, around Rs 8 crore were transferred to family members.

Gensol’s revenue rose from Rs 61 crore in the financial year ending March 2017 to Rs 1,152 crore in the financial year ending March 2024. Its share price plunged from Rs 1,126 to Rs 133 between the two periods, shrinking its market capitalisation from Rs 4,300 crore to Rs 506 crore. Meanwhile, the promoter holding dropped from over 70% to slightly above 30%.

SEBI’s probe began in June 2024, but a key trigger was the downgrade of Gensol’s credit rating after loan repayment delays. Rating agencies later found that the company had submitted fabricated conduct letters purportedly issued by the Indian Renewable Energy Development Agency Ltd. and Power Finance Corporation. Both IREDA and PFC denied issuing any such letters.

Gensol secured over Rs 977 crore in term loans from IREDA and PFC, including Rs 663.89 crore for procuring 6,400 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.

The SEBI order 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.

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.

In another case, Go Auto sent Rs 40 crore to Wellray Solar Industries Pvt Ltd, which later transferred funds to four entities, including Rs 50 lakh to Sharekhan Ltd.

India's market regulator also found that funds routed through Wellray were used to trade in Gensol shares. The order said this breached Section 67 of the Companies Act, 2013, which restricts companies from funding the purchase of their own shares. Wellray made gains through these transactions, the order noted.

Separately, Gensol’s stock exchange disclosures have also been questioned. In January 2025, the company said it had received 30,000 EV pre-orders. However, SEBI found only non-binding memoranda of understanding for 29,000 vehicles, with no confirmed delivery timelines or pricing.

An NSE inspection of the company’s Chakan facility further revealed that no EV manufacturing was taking place, raising concerns about the company’s operational claims.