Gensol Engineering Ltd.'s share price declined 2% following two major legal actions. The National Company Law Tribunal in Ahmedabad ordered the freezing and attachment of all bank accounts and lockers belonging to Gensol Engineering Ltd. and its associated entities. This action 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 NCLT allowed urgent interim relief 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 accounts and lockers to prevent further dissipation of assets or tampering of evidence.
In its order, the tribunal observed, "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.
In a separate action, the Debt Recovery Tribunal in Delhi has barred Gensol Engineering promoters from selling or transferring ownership of the company's secured assets. This order follows a petition filed by the state-owned Indian Renewable Energy Development Agency.
The DRT stated, "…concerned defendants are hereby restrained from selling, transferring, alienating, damaging, removing and disposing off or otherwise creating third party interest with regard to secured assets, movable & immovable, as detailed in the said paragraphs, until further orders." The tribunal has also asked the court-appointed officer to take "possession of hypothecated vehicles."
The assets referred to by the tribunal are primarily electric vehicles financed by non-banking financial companies, including IREDA and Power Finance Corporation. The DRT also ordered the freezing of the demat accounts of Gensol promoters, directing depositories NDSL and CDSL to freeze the accounts and file details of shares with the tribunal.
Gensol Engineering has been facing trouble since the Securities and Exchange Board of India (SEBI) barred the company and its promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, from accessing the securities market. The regulator accused them of fund diversion for personal motives. Additionally, the company's Chief Financial Officer, Jabirmahendi M Aga, recently resigned, citing the current regulatory challenges the company is facing.
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