Gensol's Trouble Mounts: NCLT Allows Freezing Of All Its Bank Accounts
The National Company Law Tribunal in Ahmedabad has ordered the freezing and attachment of all bank accounts and lockers belonging to Gensol Engineering Ltd. and its associated entities. The order comes in response to serious allegations of corporate fraud and financial misconduct.
The case before the tribunal was filed by the Ministry of Corporate Affairs.
The tribunal allowed urgent interim reliefs sought by the government, enabling the Reserve Bank of India and Indian Banks’ Association to take immediate steps to secure the financial assets of Gensol and related parties. These measures include freezing of accounts and lockers to prevent further dissipation of assets or tampering of evidence.
In its order, the tribunal observed that there were prima facie findings of grave misconduct by Gensol promoters.
The tribunal directed that notices be served to all respondents along with a copy of the petition, and listed the matter for further hearing before the regular bench on June 3, 2025.
Gensol Row
On April 15, the Securities and Exchange Board of India barred Gensol Engineering promoters Anmol Singh Jaggi and 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 the 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.
When the regulator called upon them to explain the sudden downgrade, it was revealed that the company submitted fabricated debt servicing conduct letters from state-run lenders IREDA and Power Finance Corp.
Later on, it was learnt by the credit rating agencies from IREDA and PFC that no such conduct letters were issued to Gensol by them.
Despite defaults beginning as early as December 2024, the company falsely assured rating agencies that it was regular in its payments.
Furthermore, Gensol has been asked to hold the stock split it announced, and the regulator has directed the appointment of a forensic auditor to examine its books of accounts and those of related parties.
