SEBI Says Gensol Misled Investors, No Manufacturing Happened At EV Plant In Pune
The Securities and Exchange Board of India (SEBI) unearthed serious irregularities in the operations of Gensol Engineering, including a lack of manufacturing activity at the company’s electric vehicle (EV) facility in Pune.
According to an interim order issued on April 15, these findings emerged after the markets regulator received a complaint in June 2024 alleging share price manipulation and misappropriation of company funds, reported PTI.
A key revelation came from a National Stock Exchange (NSE) investigation, which involved a site inspection of Gensol’s EV plant—Gensol Electric Vehicle Private Ltd—located in Chakan, Pune. During the visit on April 9, an NSE official reportedly found only 2-3 labourers present, with no signs of production underway.
The regulator also reviewed electricity bills for the past year, noting the highest charge by Mahavitaran was Rs 1,57,037.01 in December 2024. SEBI concluded that the data pointed to a complete absence of manufacturing activity at the leased site.
Exaggerated Orders And Questionable Tie-Ups
Gensol earlier declared, on January 28, 2025, that it had secured pre-orders for 30,000 electric vehicles showcased at the Bharat Mobility Global Expo 2025. However, SEBI's examination of documents revealed these claims were based on Memoranda of Understanding (MoUs) signed with nine entities for 29,000 units. The MoUs lacked crucial details such as pricing and delivery timelines. “Therefore, it prima facie appeared that the company was making misleading disclosures to investors,” Sebi said in its order.
In another instance, Gensol disclosed on January 16, 2025, that it entered a strategic partnership with Refex Green Mobility Ltd, which included the transfer of 2,997 electric vehicles to the latter and the assumption of Gensol's existing loan worth Rs 315 crore . But the agreement was later withdrawn, as indicated in a March 28 disclosure.
Similarly, the company informed the exchanges on February 25, 2025, of a non-binding term sheet for a Rs 350 crore strategic deal involving its US subsidiary, Scorpius Trackers Inc., incorporated in July 2024. When asked to justify the subsidiary’s valuation, Gensol failed to provide any explanation.
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Financial Misuse And Regulatory Action
The SEBI inquiry pointed to the misappropriation and diversion of company funds by promoter-directors Anmol Singh Jaggi and Puneet Singh Jaggi. Gensol obtained loans worth Rs 977.75 crore from IREDA and PFC between FY22 and FY24, of which Rs 663.89 crore was allocated for the purchase of 6,400 electric vehicles. However, only 4,704 EVs were actually procured, amounting to Rs 567.73 crore as verified by supplier Go-Auto, the regulator found.
Given the requirement of a 20 per cent equity contribution, the expected expenditure stood at Rs 829.86 crore, leaving an unexplained gap of Rs 262.13 crore. SEBI noted that a portion of these funds was rerouted to entities linked to the Jaggi brothers or used for personal gains—such as the purchase of luxury property, fund transfers to relatives, and investments in private ventures owned by the promoters.
In light of these findings, the markets regulator imposed strict restrictions on Gensol and its promoters. The Jaggi brothers have been barred from holding any key management or board-level roles and are prohibited from accessing the securities market until further notice. SEBI also instructed the company to halt its proposed 1:10 stock split. Subsequently, both promoters resigned from their directorial positions.
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