SEBI Cracks Down On Gensol Promoters Over Alleged Fund Misuse; What We Know So Far

The Securities and Exchange Board of India’s (SEBI) interim order against Gensol Engineering promoters Anmol Singh Jaggi and Puneet Singh Jaggi accuses them of misusing public company funds for personal gain, routing money through complex transactions, and spending on luxury real estate.

On Tuesday, Gensol Engineering’s shares tumbled 5 per cent after SEBI barred the Jaggi brothers from participating in the securities market. The regulator accused the promoters of diverting sanctioned loan funds for personal use while deceiving investors, financial institutions, and regulatory authorities.

According to the order, the misuse of funds was routed through intricate financial arrangements, raising serious questions about transparency and governance at the company. SEBI’s action includes not only restricting the promoters from accessing capital markets but also prohibiting them from holding any directorial or key managerial positions in listed companies until further notice.

The findings form part of an ongoing investigation that could have broader implications for corporate accountability and compliance standards across the startup and clean energy sectors, where Gensol Engineering had positioned itself as a key player.

Gensol’s Meteoric Rise

Once celebrated as a rising star in India’s clean tech sector, Gensol Engineering is now under regulatory fire. Founded by Anmol Singh Jaggi, the company began as a solar EPC firm before diversifying into electric vehicles (EVs). Its rapid growth saw it move from the BSE SME platform in 2019 to the main board by 2023. But that success story has since unraveled.

Riding high on the EV boom, Gensol’s leasing arm supported BluSmart, an electric ride-hailing startup also promoted by the Jaggi family. However, its market value has plummeted dramatically from Rs 4,300 crore to just Rs 506 crore in a year. Retail investor participation surged during its ascent, with its shareholder base ballooning from 155 in FY20 to over 1.1 lakh by March 2025. Yet, the stock has crashed by 85 per cent in the past 12 months. Promoter holding has also halved, from 70.72 per cent to 35 per cent.

BluSmart, too, has been caught in the crossfire. In March, its top leadership resigned, including the CEO, Chief Business Officer, CTO, and VP of Experience. Though officially linked to restructuring, the timing raised eyebrows.

Now, at the center of the storm is an ongoing SEBI investigation. The regulator alleges that Gensol diverted nearly Rs 262 crore from EV loans — funds sanctioned by public institutions like the Indian Renewable Energy Development Agency (IREDA) and Power Finance Corporation (PFC) to purchase 6,400 EVs. Only 4,704 vehicles were actually procured.

SEBI’s findings paint a troubling picture. A portion of the funds was allegedly redirected toward luxury personal expenses, including a Rs 42.94 crore apartment at DLF’s upscale Camellias in Gurugram. Other expenses included high-end travel, golf equipment, credit card bills, and transfers to family members.

The money trail allegedly ran through Gensol’s EV supplier, Go-Auto Pvt Ltd, before being funneled to entities controlled by the promoters. From a Rs 71.41 crore loan, Rs 50 crore landed with Capbridge Ventures LLP, a promoter-linked firm. Another Rs 43.69 crore loan saw Rs 40 crore redirected to Wellray Solar Industries, another affiliated entity.

SEBI also highlighted a series of circular fund transfers involving Gensol EV Lease, GoSolar Ventures, and BluSmart Mobility, allegedly intended to obscure the origin and flow of funds. In addition to these movements, significant sums were transferred to various promoter-linked entities, including Rs 29.5 crore to Gensol, Rs 5.6 crore to Matrix Gas and Renewables, and ₹3.9 crore to Prescinto Technologies. The regulator also flagged Rs 50 lakh and another Rs 40.7 crore that were routed through Sharekhan Ltd, reportedly used for trading in Gensol’s own shares.

In a separate instance, Rs 117.47 crore from PFC was split, with Rs 96.69 crore transferred to Gensol Consultants and Capbridge Ventures, and Rs 40 crore further routed to Gensol Ventures. At least Rs 50 lakh also reportedly ended up with Third Unicorn, a startup founded by Ashneer Grover, himself previously embroiled in fund misuse allegations at BharatPe.

SEBI has barred Anmol Singh Jaggi and Puneet Singh Jaggi from the securities market and from holding key roles in listed companies pending further investigation. “The promoters were running a listed public company as if it were a proprietary firm… as if the company’s funds were the promoters’ piggybank,” SEBI wrote in its interim order.

Also read: BluSmart Suspends Ride Bookings Amid Financial Probe And Leadership Exodus — Details

Gensol Shares Crash

The fallout from SEBI’s action against Gensol Engineering is having far-reaching consequences for investors and lenders. The company’s stock has nosedived nearly 85 per cent over the past year, erasing massive shareholder value. Its market capitalisation has plunged from a peak of Rs 4,300 crore to just Rs 506 crore as of April 2025.

The crisis deepened after it emerged that state-run lenders — the Indian Renewable Energy Development Agency (IREDA) and Power Finance Corporation (PFC) — were allegedly misled with forged letters claiming timely debt repayments. Both institutions later denied issuing the letters and confirmed repeated defaults by Gensol.

In response, a forensic audit has been ordered to examine Gensol’s financial records and transactions in detail. The company’s proposed stock split has also been suspended pending the outcome of the investigation.

As part of the regulatory clampdown, SEBI has barred promoters Anmol Singh Jaggi and Puneet Singh Jaggi from holding any key managerial or directorial roles in listed companies. 

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