Gensol Crisis: ED Seeks Lookout Circular Against Promoters Jaggi Brothers

The Enforcement Directorate has formally asked the Bureau of Immigration to issue a Look-Out Circular against Gensol Engineering Ltd.'s promoters Puneet Singh Jaggi and Anmol Singh Jaggi in connection with an ongoing probe under the Foreign Exchange Management Act., according to people familiar with the matter.

Anmol Jaggi is reportedly in Dubai, the people quoted above told NDTV Profit on Friday.

On Thursday, the agency searched multiple locations linked to Gensol's promoters in Delhi, Gurugram and Ahmedabad. The ED is investigating suspected foreign exchange violations involving unauthorised remittances of around Rs 200 crore to Rs 300 crore.

It suspected that a portion of the term loans raised by the company was diverted overseas and is collecting information on promoter-linked entities that may have been used for fund routing, the people said, adding that the investigators are also examining the possible use of cryptocurrency in the suspected diversion.

The agency questioned co-promoter Puneet Singh Jaggi for over seven hours at its Delhi office, the people quoted above told NDTV Profit. Earlier in the day, a report by news agency PTI had cited sources to say that Puneet Jaggi had been taken into custody, but a senior ED official later denied any arrest or detention.

The investigation came amid broader regulatory scrutiny of the company. On April 15, the Securities and Exchange Board of India barred Gensol Engineering, CEO Anmol Singh Jaggi and Promoter-Director Puneet Singh Jaggi from accessing the securities market. SEBI also prohibited them from holding any key managerial roles, following findings that funds had been diverted in a loan-financed electric vehicle purchase scheme.

According to SEBI's investigation, Gensol raised Rs 975 crore in loans to acquire 6,400 electric vehicles but purchased only 4,704 units for Rs 567.73 crore. The regulator found that more than Rs 200 crore remained unaccounted for, triggering concerns about fund misuse.

Credit rating agencies ICRA and Care Ratings downgraded Rs 2,050 crore of Gensol's debt to default status in February. This included over Rs 1,640 crore in long-term borrowings and more than Rs 400 crore in short-term debt. The downgrades followed delays in loan servicing and concerns over alleged data falsification.

Gensol's shares have been consistently falling since then, hitting multi-month lows as regulatory and financial pressures mounted.