In a sweeping crackdown on corporate misconduct, the Securities and Exchange Board of India (SEBI) has taken decisive action against Gensol Engineering Limited and its promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, for orchestrating a large-scale financial fraud. SEBI’s interim order dated April 15, 2025, bars both individuals from holding any directorial roles and from participating in the securities market, following damning revelations of fund diversion and falsification of financial records.
The case centers around Rs 977.75 crore in term loans that Gensol Engineering secured from government-backed lenders IREDA and PFC, intended for the purchase of 6,400 electric vehicles (EVs) for affiliate company BluSmart. However, forensic analysis revealed that only 4,704 EVs were procured for Rs 567.73 crore, leaving over Rs 262 crore unaccounted for.
SEBI’s investigation found a web of transactions designed to siphon off the borrowed funds for personal gain. A particularly egregious example includes Rs 50 crore funneled through Capbridge Ventures LLP—a firm where both Jaggi brothers are designated partners—used to purchase a luxury apartment at DLF Camellias in Gurgaon. These transfers were intentionally layered through multiple accounts to obscure the trail.
The misuse extended further to a related entity, Wellray Solar, which received over Rs 424 crore from Gensol between FY23 and FY24, despite having minimal operational credentials. A significant portion of these funds—Rs 246 crore—was funneled to promoter-linked companies and individuals. Personal payouts from Wellray to Anmol and Puneet Jaggi amounted to Rs 25.76 crore and Rs 13.55 crore respectively, which were spent on foreign currency, luxury goods, golf accessories, and family transfers.
In addition, SEBI uncovered efforts to manipulate the company’s creditworthiness. Gensol falsified debt servicing records and submitted forged conduct letters from IREDA and PFC to credit rating agencies CARE and ICRA, masking defaults that extended beyond 30 days—an outright violation of SEBI’s disclosure regulations.
The fraud also spilled into the securities market. Wellray Solar was found to have conducted trades worth Rs 338 crore, with 99% of its volume focused on Gensol’s own shares—raising red flags around stock price manipulation.
Given the extent of the misconduct, SEBI has not only frozen all trading activity for the Jaggi brothers and Gensol but also halted a proposed stock split. A forensic auditor has been appointed to continue the investigation and uncover any further wrongdoing.
In its sharply worded order, SEBI stated: “The Company’s funds were routed to related parties and used for unconnected expenses, as if the Company’s funds were promoters’ piggybank.” The regulator concluded that Gensol operated more like a family-run fiefdom than a publicly listed entity, completely disregarding corporate governance norms.
This high-profile case is a stark reminder of the vulnerabilities in India’s corporate ecosystem and underscores the need for stricter regulatory surveillance on promoter-led entities. As the investigation deepens, more consequences are expected, possibly including criminal proceedings, making this one of the most significant corporate governance scandals in recent memory.
