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The market regulator initiated the action against Gensol promoters Anmol Singh Jaggi and Puneet Singh Jaggi over the issue of fund diversion.
The investigation is currently underway, while the restriction will remain in place until further orders. (Photo: Gensol)
Shares of Gensol Engineering Limited hit the 5% lower circuit limit at Rs 122.68 apiece on the NSE on Wednesday after market regulator Securities and Exchange Board of India (SEBI) barred the company’s promoters from the securities market and put the stock split proposal on hold.
The market regulator initiated the action against the promoters of Gensol Engineering, Anmol Singh Jaggi and Puneet Singh Jaggi, over the issue of fund diversion and violation of governance norms. In its interim order issued on April 15, SEBI prohibited Gensol Engineering and the two promoters from trading in the securities market until further orders.
In connection to their alleged fund diversion, SEBI has also prohibited both Anmol and Puneet from serving as directors or holding any key managerial position at Gensol during the restriction period. SEBI has also put the proposed 1:10 stock split on hold.
In a 29-page interim order released on Tuesday, SEBI outlined that the funds diverted from Gensol Engineering were used by entities toward promoters for personal benefits.
“Some of these funds were then used for purposes unrelated to the purpose/objective of the sanctioned term loans, which included (i) personal expenses of the promoter, including purchase of high-end real estate; (ii) benefit to the private promoter entities/ transfer of funds to promoters’ close relatives, etc.” the interim order mentioned.
The crackdown came in the wake of a complaint previously filed in June 2024, raising doubts about the share price manipulation and misappropriation of company funds by the promoters.
After receiving the complaint the capital market regulator initiated a detailed probe into the matter. “The prima facie findings have shown mis-utilisation and diversion of funds of the company (GEL) in a fraudulent manner by its promoter directors, Anmol Singh Jaggi and Puneet Singh Jaggi, who are also the direct beneficiaries of the diverted funds,” the order read.
The investigation is currently underway, while the restriction will remain in place until further orders.
According to the order, a broader loan of Rs 42.94 crore was taken by Gensol Engineering, ultimately routed through promoter Anmol Singh Jaggi’s Capbridge Ventures for purchasing a luxury apartment in DLF Camillias. He allegedly also used Rs 50 lakh from the diverted funds to invest in Ashneer Grover’s startup, Third Unicorn, and for other personal expenses.
Likewise, Puneet Singh Jaggi’s bank statements also show him receiving a significant portion of funds from Wellray, amounting to nearly Rs 13.55 crore. The money was transferred to related parties and family and used for personal needs. Many of his transactions were made on foreign currency purchases, payments to American Express cards, and self-transfers, amounting to lakhs. SEBI claimed that the loans, which were originally obtained to purchase electric vehicles, were instead rerouted by the Jaggi brothers.
The company received a total loan of Rs 93.88 crore from the Indian Renewable Energy Development Agency (IREDA), which was moved through a web of transactions.
