Markets regulator Sebi has mentioned it discovered “no manufacturing activity” at Gensol Engineering’s electrical automobile (EV) plant in Pune with solely 2-3 labourers current when a Nationwide Inventory Alternate (NSE) official visited the positioning.
SEBI Bhavan at BKC Bandra, in Mumbai.(Vijay Bate/HT photograph)
These revelations had been a part of markets regulator Sebi’s interim order issued on April 15 following a grievance acquired in June 2024 alleging manipulation of Gensol’s share worth and misappropriation of funds.
In its order, the Securities and Alternate Board of India (Sebi) discovered discrepancies in addition to deceptive disclosures to buyers by Gensol Engineering, an organization promoted by brothers Anmol Singh Jaggi and Puneet Singh Jaggi.
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One of many disclosures got here from an investigation carried out by the NSE, which revealed a scarcity of producing exercise at Gensol’s EV plant — Gensol Electrical Automobile Non-public Ltd — at Chakan in Pune.
Throughout a website go to to the ability on April 9, an NSE official discovered solely 2-3 labourers current.
“It was found that there was no manufacturing activity at the plant with only 2-3 labourers present there. The NSE official called for details of electricity bills of the unit and it was observed that the maximum amount billed by Mahavitaran during the last 12 months was ₹1,57,037.01 for December 2024.
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“Therefore, it may be inferred that there was no manufacturing exercise on the plant website which is on a leased property,” Sebi revealed in its interim order passed on April 15.
The visit followed an announcement by Gensol to the stock exchanges on January 28, 2025, claiming it had received pre-orders for 30,000 units of its newly launched EVs showcased at the Bharat Mobility Global Expo 2025.
However, upon reviewing the documents provided by the company, Sebi found that the orders were Memorandum of Understandings (MoUs) entered with nine entities for 29,000 cars.
The MoUs were in the nature of an expression of willingness with no reference to the price of the vehicle or delivery schedules.
Therefore, it prima facie appeared that the company was making misleading disclosures to investors, Sebi stated.
In another disclosure dated January 16, 2025, Gensol informed the exchanges regarding a strategic tie-up with Refex Green Mobility Ltd “for the switch of two,997 electrical four-wheelers” to Refex.
As a part of the tie-up, Refex was to assume Gensol’s existing loan of ₹315 crore. However, in a disclosure dated March 28, the proposed takeover by Refex was withdrawn.
In yet another disclosure dated February 25, 2025, Gensol informed the exchanges that it had signed a non-binding term sheet for ₹350 crore for a strategic transaction involving the sale of Gensol’s US subsidiary — Scorpius Trackers Inc.
It was noted that the US subsidiary was incorporated on July 22, 2024.
When probed by Sebi regarding the basis of such valuation of ₹350 crore, Gensol failed to submit any explanation or rationale.
These were uncovered in a Sebi probe, which prima facie, revealed “mis-utilization and diversion of funds of the corporate in a fraudulent method by its promoter administrators, Anmol Singh Jaggi and Puneet Singh Jaggi, who’re additionally the direct beneficiaries of the diverted funds”.
Gensol secured ₹977.75 crore in loans from IREDA and PFC between FY22 and FY24. Of the mortgage, ₹663.89 crore was meant for buying 6,400 EVs. Nonetheless, Gensol admitted to buying solely 4,704 EVs, price ₹567.73 crore, as confirmed by provider Go-Auto.
Provided that Gensol was additionally required to supply 20 per cent fairness contribution, the overall outlay ought to have been ₹829.86 crore, leaving an unaccounted-for quantity of ₹262.13 crore.
The Sebi probe discovered that funds meant for EV purchases had been usually routed again to Gensol or entities linked to Jaggi brothers.
Among the funds had been used for private bills of the promoters, equivalent to the acquisition of a luxurious house, transfers to shut relations, and investments benefiting non-public entities owned by the promoters.
In response to those governance lapses, Sebi took a number of stringent measures, together with prohibiting Gensol and its promoters — Jaggi brothers-from accessing the securities market till additional discover.
Additionally, it barred the Jaggi brothers from holding any directorship or key administration place in Gensol.
Moreover, Sebi directed Gensol Engineering to place its deliberate inventory cut up into the ratio of 1:10 on maintain.