NewKerala.com

Key Points

Gensol Engineering's stock nosedived 95% after SEBI exposed its promoters for siphoning EV loans into personal luxuries. The Jaggi brothers allegedly diverted ₹978 crore to buy a Gurugram apartment, golf sets, and spa treatments. PFC labeled the loan a fraud, while NCLT froze all company accounts to prevent further misuse. Investors lost nearly ₹4,000 crore as regulatory actions unraveled the financial misconduct.

Key Points: Gensol Engineering Stock Crashes 95% After SEBI Fraud Probe

  • SEBI bars Gensol promoters for fund diversion
  • ₹978 crore loans misused for luxury purchases
  • NCLT freezes accounts amid fraud probe
  • Stock plunges 95% from all-time high
2 min read

Gensol Engineering's stock sinks over 95 pc, investors lose nearly Rs 4,000 crore

Investors lose ₹4,000 crore as SEBI exposes Gensol promoters diverting EV loans for luxury spending and real estate.

"Based on our preliminary investigation, we have found this to be a fraud – Parminder Chopra, PFC Chairman"

New Delhi, June 11

Investors in the Gensol Engineering Limited (GEL) have suffered a massive loss to the tune of nearly Rs 4,000 crore as the stock of the fraud-hit company sank by more than 95 per cent.

Gensol Engineering's stock closed 2 per cent down at Rs 51.42 on the National Stock Exchange (NSE) on Wednesday. The stock has slipped 95.42 per cent from its all-time high.

In April, the Securities and Exchange Board of India (SEBI) took strict action against Gensol’s top promoters, Anmol Singh Jaggi and Puneet Singh Jaggi. The capital markets regulator barred both from accessing the securities market and from holding key management roles.

The regulator’s investigation revealed that Gensol had diverted funds raised through a loan-financed electric vehicle (EV) purchase scheme.

The SEBI had said that GEL promoters diverted the loan taken to buy electric vehicles (EVs) to buy a luxury apartment in DLF's 'The Camellias' in Gurugram. According to the regulator, loans taken to purchase electric vehicles for ride-hailing service BluSmart were diverted through several entities and later used for personal gain.

The probe further revealed that promoter Anmol Singh Jaggi allegedly transferred company funds to family members and used them for personal purposes. According to the order, Jaggi sent Rs 6.2 crore to his mother and Rs 2.98 crore to his wife. He also purchased luxury items from the company's money, including spending Rs 26 lakh on a golf set, Rs 17 lakh on shopping at Titan, and over Rs 10 lakh on a spa session.

The market regulator found that Gensol Engineering had taken a loan of Rs 978 crore from two government companies, the IREDA and the PFC, between 2021 and 2024. State-run PFC Chairman and Managing Director Parminder Chopra reportedly termed the loan given to Gensol Engineering as a fraud. "Based on our preliminary investigation, we have found this to be a fraud," she said.

Late last month, the National Company Law Tribunal (NCLT) in Ahmedabad ordered the freezing and attachment of all bank accounts and lockers belonging to Gensol Engineering Limited and its associated entities. The action follows a complaint filed by the Ministry of Corporate Affairs (MCA), which has accused the company of serious corporate fraud and financial misconduct.

The aim is to prevent any further misuse of funds or tampering with evidence. The NCLT also stated that there is initial proof suggesting grave misconduct by the company’s promoters.

- IANS

Share this article:

Reader Comments

R
Rajesh K.
Shocking to see such blatant misuse of public funds! ₹26 lakh on golf sets while investors lose everything? SEBI needs to make an example of such fraudsters to restore faith in our markets. Hope the frozen assets are used to compensate small investors first.
P
Priya M.
This is why retail investors suffer in India. Big promoters play with our hard-earned money while regulators act only after the damage is done. ₹4000 crore loss is someone's life savings gone! 😡 Need stricter background checks before companies get listed.
A
Amit S.
The real question is - how did government institutions like IREDA and PFC give ₹978 crore loan without proper due diligence? Taxpayers' money is being thrown around carelessly. Heads should roll in these PSUs too!
S
Sunita R.
As someone who worked in corporate audits, I can say this is just the tip of the iceberg. Many startups misuse funds but get away because they're "disruptors". Hope this case sets a precedent for better corporate governance in India. 🤞
V
Vikram J.
₹10 lakh spa sessions with investors' money? The audacity! While SEBI's action is good, the punishment should be severe enough to deter others. Maybe confiscate all personal assets of promoters involved in such frauds.
N
Neha T.
This case shows why we need stronger whistleblower protection laws in India. Such frauds go on for years because employees who notice irregularities are afraid to speak up. Corporate India needs a culture of accountability, not just fancy valuations.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50