TaxTMI 
TaxTMI 
2025 (7) TMI 646
X X X X Extracts X X X X
X X X X Extracts X X X X
....t up from Rs. 2 Crore to Rs. 209 Crore and net profit from Rs. 2 Crore to Rs. 80 Crore. The same is depicted in the table below: 4. For the corresponding period (FY 2017 to H1 of FY 2025), the balance sheet of the Company recorded an equally impressive growth. The total liabilities/balance sheet size expanded from Rs. 10 Crore in FY 2017 to Rs. 2,202 Crore in the first half of FY 2025. During this period, Gensol's borrowings increased from Nil in FY 2017 to Rs. 1,045 Crore in the first half of FY 2025, after touching Rs. 1,260 Crore in FY 2024. 5. The expansion in the balance sheet size of Gensol between FY 2017 and H1 of FY 2025 is shown below (Source: Screener.in): 6. As per publicly information available on Screener.in and the latest data on shareholding pattern of Gensol obtained from Registrar & Transfer Agent (RTA) of the company, the number of shareholders increased from a mere 155 in FY 2020 (the year in which the company was listed on the BSE SME Platform) to 1,09,872 as of March 31, 2025. During this period, promoter holding in Gensol came down from 70.72% in FY 2020 to 35% as on March 31, 2025. The shareholding pattern of Gensol from the time of its listing till....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the Company categorically denied "any involvement in falsification claims" made by the rating agency. 15. SEBI called for information from the CRAs regarding the downgrade of the ratings assigned to Gensol. The CRAs submitted that pursuant to news reports concerning default by BluSmart Mobility Private Limited (BluSmart), a related party of Gensol, on February 24, 2025, the CRAs initiated a review of the ratings assigned to the instruments of Gensol. 16. As per submissions of CRAs, Gensol responded to CRA queries by stating that it was regular in its debt servicing and that the default by BluSmart had no impact on the Company. 17. The CRAs further submitted that when they sought term loan statements, Gensol provided the statements of all lenders except those of Indian Renewable Energy Development Agency Ltd. (IREDA) and Power Finance Corporation (PFC). In respect of these two lenders (PFC and IREDA), Gensol shared Conduct Letters purportedly issued by IREDA and PFC, which stated that Gensol was regular in its debt servicing. 18. CARE also submitted that Gensol requested withdrawal of the ratings assigned to it and, in support of this request, submitted a No Objection ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....." 22. Para 4.1 of Section V-B of the SEBI Master Circular SEBI/HO/CFD/PoD2/CIR/P/0155 dated November 11, 2024 provides that "Listed entities shall make disclosure of any default on loans, including revolving facilities like cash credit, from banks / financial institutions which continues beyond 30 days. Such disclosure shall be made promptly, but not later than 24 hours from the 30th day of such default." 23. Accordingly, the defaults mentioned at Sl. Nos. 3, 4, 6, 7, 8 and 9 of the Table under paragraph 20 were required to be made as per the SEBI Master Circular SEBI/HO/CFD/PoD2/CIR/P/0155 since the defaults on the loans continued for 30 days or more as of February 28, 2025 and March 31, 2025. 24. The details of the term loans availed by Gensol from IREDA and PFC during the period FY 22 to FY24 were looked into. The details of the individual term loans sanctioned by the two lenders are given in the Table below: Sl. No. FY Lender Name Amount as per Annual Report (Rs. In Crores) Purpose of loan 1. 2021-22 IREDA 35.70 Procurement of EVs 2. 2022-23 IREDA 35.70 3. 2022-23 IREDA 71.41 4. 2022-23 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... promoters' close relatives; etc. In order to demonstrate the nature and structure of these diversions/misutilization, the flow of funds from Gensol to Go-Auto and thereafter to entities connected to promoters of Gensol in the case of three of the above mentioned loans (viz. loans mentioned at serial numbers 3, 6 and 8 in the Table under Para 24), on sample basis, is discussed below. 30. For ease of reference, the details of the related parties to which fund transfers were observed from Go-Auto are detailed in the Table below, before explaining the nature of transactions entered with these entities. Sl. No Related or Connected entities Relationship Disclosed by the Company as Related party 1. Capbridge Ventures LLP (Capbridge) Anmol Singh Jaggi and Puneet Singh Jaggi are designated partners of Capbridge. Yes 2. Matrix Gas and Renewable Ltd. (Matrix) Anmol Singh Jaggi is a promoter Director. Paneet Singh Jaggi is an Ex- Director. Yes 3. Param Care Private Limited (Param) Anmol Singh Jaggi and Puneet Singh Jaggi are Directors . Yes 4. Wellray Solar Industries Private Limited (Wellray) Company was owned by Gensol Ventures Pvt....
X X X X Extracts X X X X
X X X X Extracts X X X X
....apartment in the project The Camellias. (b) On October 06, 2022, Capbridge paid Rs. 42.94 Crore to DLF as part of the consideration for the above apartment booked by Jasminder Kaur. (c) On October 20, 2022, the allotment was formally made to Jasminder Kaur. (d) Thereafter, on request, the allotment was substituted in favour of Capbridge. (e) The advance of Rs. 5 Crore was returned to Jasminder Kaur by DLF on November 21, 2022. 35. A pictorial representation of the above movement of funds is given below: 36. It can be noted from the above that funds availed by Gensol as loans for procuring EVs were, through layered transactions, partly utilised for buying a high-end apartment in The Camellias, DLF Gurgoan, in the name of a firm where the MD of Gensol and his brother are designated partners. 37. It was separately noted that the Rs. 5 Crore which was initially paid as booking advance by Jasminder Kaur, mother of Anmol Singh Jaggi, was also sourced from Gensol. Further, it was noted that once DLF returned the advance to Jasminder Kaur, the funds did not go back to the Company but were instead credited to another related party of Gensol viz. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....7 with ICICI Bank), which had a balance of Rs. 4.93 Lakh before the receipt. Thereafter, on the same day, Wellray made the following outward transfers, totaling Rs. 39.50 Crore: (a) Rs. 5.60 Crore was transferred to Matrix (Bank A/c No. 058605002549 with ICICI Bank), which it prima facie appears to have been utilized for meeting operational expenses. (b) Rs. 29.50 Crore was transferred back to Gensol Engineering Limited (Bank A/c No. 058605001635 with ICICI Bank). This amount appears to have been deployed for meeting operational expenses. (c) Rs. 3.90 Crore was transferred to Prescinto (Bank A/c No. 058605002184 with ICICI Bank) and the funds were similarly utilized for operational needs of Prescinto. (d) Wellray transferred Rs. 50 Lakh to stock broker Sharekhan Limited (Sharekhan). These funds were subsequently deployed to trade in the scrip of Gensol Engineering Limited. (This aspect is also addressed separately in subsequent paragraphs of this Order.) 43. A pictorial representation of the above movement of funds is given below: 44. Further, it was noted that Wellray had transferred funds back to Go-Auto through circular movement of funds....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is bank A/c No. 921020036427118), which had a prior balance of Rs. 5.07 Lakh (b) Rs. 50.04 Crore was transferred to Capbridge Ventures LLP (A/c No. 920020064107731 with Axis Bank), which had a balance of Rs. 97,209 before the transaction. On the same date, Capbridge transferred Rs. 40 Crore to Gensol Ventures Pvt. Ltd. (A/c No. 058605500770 with ICICI Bank), which had a debit balance of Rs. 38.12 Crore prior to this transaction. 48. Based on the fund trail and account balances, it is prima facie observed that Rs. 96.69 Crore was diverted to promoter and promoter-linked entities, bypassing the stated end-use of the PFC loan. 49. A pictorial representation of the above movement of funds is given below: 50. Further, it was noted that Capbridge had transferred funds back to Go-Auto, through circular movement of funds which originated from Go-Auto, itself. It was noted that an amount of Rs. 10 Crore was circulated four times by Go-Auto itself through Gensol EV Lease Pvt. Ltd. and Go-Solar Venture Private Limited on 04/01/2024. Details are given below: Date From party Amount (Rs. In Crores) To party Amount (Rs. In Crores) To party Amount (Rs. In Cro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nbsp;37.5 Anmol Singh Jaggi 37.5 27/12/2023 Jubilant Motor Works Pvt Ltd 33.02 24.98 Gensol Consultant 058605 500351 50 Go Auto 0679200 0003065 46.64 53. From the above, it is prima facie observed that funds amounting to Rs. 96.69 Crore (Rs. 46.65 Crore + Rs. 50.04 Crore), as mentioned at para 48 above, were diverted from the listed company and ultimately reached the private promoter related entities of Gensol. Further, it can be seen that Rs. 37.5 Crore out of the loan amount of Rs.171.30 Crore taken by Gensol EV Lease Pvt. Ltd., (a subsidiary of Gensol), from IREDA was ultimately transferred to Anmol Singh Jaggi. This aspect need further examination. 54. From the above analysis of the utilization of funds (loans) received by Gensol from IREDA and PFC, it prima-facie appears that the Company grossly mis- utilized funds and also diverted certain funds to the promoter/promoter-related entities. While the Company was to have spent an amount of Rs. 829.86 Crore (including promoter contribution) for buying EVs, bank statement analysis showed that it had transferred Rs. 775 Crore ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....en in the Table below: Particulars FY 23 (Rs. In Crores) FY 24 (Rs. In Crores) Total Purchases and Expenses booked by Gensol against Wellray 66.98 71.55 Total Sales and Income booked by Gensol against Wellray 6.03 6.10 61. It was also noted that Wellray had made an investment in Gensol and was a disclosed public shareholder of Gensol. A snapshot of the financial position of Wellray is also given below: Particulars FY20 (Rs. In Crores) FY 21 (Rs. In Crores) FY 22 (Rs. In Crores) FY 23 (Rs. In Crores) Profit & Loss Statement Revenue from operations 9.53 17.75 23.65 65.25 Cost of Goods Sold 9.11 25.37 29.73 72.22 Profit after tax 0.00 -7.71 -5.42 -5.80 Balance Sheet Investments in Gensol - - - 14.18 62. Thus, it is observed that most of the revenue of Wellray was booked through Gensol. Details are given below: Particulars FY 22 (Rs. In Crores) FY 23 (Rs. In Crores) Sales to Gensol by Wellray 13.07 59.46 Total Sales of Wellray 23.65 65.25 % of total Sales of Wellray 55% 91% *Financia....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted Party Gensol Consultants Pvt. Ltd. 11.50 10.10 21.60 Disclosed Related Party Blu-Smart Fleet Pvt. Ltd. 10.00 - 10.00 Disclosed Related Party Prescinto Technologies Pvt. Ltd. 3.84 5.42 9.26 Disclosed Related Party Param Renewable Energy Pvt. Ltd. 7.00 7.00 Disclosed Related Party Total 127.47 118.60 246.07 67. As brought out in the Table above, Wellray has transferred funds amounting to Rs. 39.31 Crore to Anmol Singh Jaggi and Puneet Singh Jaggi, promoters of Gensol. The details of the analysis of the further utilization of funds by the said promotors are given below: Utilization of funds by Anmol Singh Jaggi 68. From the analysis of the bank statements of Anmol Singh Jaggi, it is prima-facie observed that majority of the funds (Rs. 25.76 Crore) as mentioned above, were transferred to other related parties, family members or utilized for personal expenses. The details of further utilisation of funds received from Wellray by Anmol Singh Jaggi are given in the Table below: Name of The Party Amount (Rs.) Remarks Gensol Ventures Pvt. Ltd. 10,63,91,890 Promoter of Genso....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e BIL/INFT/000671661789/PSJCC/Self 11,40,000 Appears to be for personal use Psjcc1008/Self 4,00,000 Appears to be for personal use Lease Deed Regi 3,00,000 Appears to be for personal use Mugdha Kaur Jaggi 3,00,000 Spouse of Anmol Singh Jaggi Ali Imran Naqvi 2,61,843 Executive Director at Gensol Total 13,43,21,567 Preferential Issue by Gensol Engineering Limited 70. In September 2022, Gensol made a preferential issue of 12,81,993 equity shares at a price of Rs. 1,036.25/- per share to investors which included promoter group entities, details of which are given in the Table below: Particulars Number of shares Amount in Crores (Rs.) Promoter/Promoter Group 97,445 10.09 Others 11,84,548 122.75 Total 12,81,993 132.84 71. Under the promoter/promoter group category, 'Gensol Ventures Private Limited invested Rs. 10.09 Crore in the above preferential allotment on September 26, 2022, from its Account No. 058605500770 with ICICI Bank. 72. Upon tracing the source of funds, it was noted that Anmol Singh Jaggi and Puneet Singh Jaggi had transferred Rs. 10.07 Crore to Gensol Ventures....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... - May 7,78,22,780 - Jun 4,82,72,008 30,76,176 Jul 1,97,70,884 48,89,70,887 Aug - 9,96,60,761 Nov 14,95,44,688 - Dec 48,60,180 11,78,96,384 2024 Jan 1,49,32,076 - Feb 3,84,62,148 5,63,63,679 Mar 4,60,31,549 3,57,94,628 Apr 8,66,53,854 3,88,85,000 May 6,11,02,180 - Jun 20,95,86,297 14,23,00,844 Jul 7,91,53,950 36,82,94,973 Aug 10,09,789 35,93,48,082 Oct 4,55,09,012 - Nov - 4,81,65,000 Total 1,60,51,05,325 1,78,44,28,644 78. It was noted from the analysis of the bank statements of Wellray that out of the Rs. 137.57 Crore cumulatively transferred by Wellray to the stockbroker Sharekhan till March 2024 Rs. 101.35 Crore was received from Gensol and its related parties. A party-wise breakup of these inflows is provided below: Rs. In Crores Source of Funds for Wellray FY 2022-23 FY 2023-24 Grand Total Gensol Engineering Limited 3.75 36.95 40.70 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed Exchanges that Gensol and Refex Green Mobility Limited (Refex) were "pleased to announce a strategic tie-up for the transfer of 2,997 electric four-wheelers (e4Ws)" to Refex. As per the said disclosure, Refex would in turn, assume Gensol's existing loan facility amounting to Rs.315 Crore. However, in a disclosure dated March 28, 2025, the proposed takeover by Refex was withdrawn. 84. Further, vide a disclosure dated February 25, 2025, Gensol informed Exchanges that Gensol had signed a non-binding term sheet for an amount of Rs. 350 Crore for a strategic transaction involving the sale of Gensol's US Subsidiary, viz., Scorpius Trackers Inc. It was noted that the said US Subsidiary was incorporated on July 22, 2024. When probed by SEBI regarding the basis of such valuation of Rs.350 Crore, Gensol has failed to submit any explanation / rationale. Pledge of Shares made by Promoters to IREDA 85. As mentioned in para 6 above, the shareholding of the promoters of Gensol had come down to 35.125% as of March 31, 2025. The promoters now hold 1,33,48,359 shares in the Company. 86. We have been informed by IREDA vide email dated April 11, 2025 that promoters have created pledges ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pany's books, ultimately resulting in losses to the investors of the Company. 90. While the fund diversion primarily occurred in the context of electric vehicle (EV) purchases intended for leasing to a related party, the risk it creates is neither isolated nor contained. The company has a substantial order book, comprising critical infrastructure contracts awarded by government and public sector entities in the renewable EPC space. These contracts are not just capital-intensive - they also require strict financial discipline, timely execution, and reputational credibility to retain project flow and institutional trust. 91. In the instant case, prima facie evidence of blatant violation of rules of corporate governance is writ large over the workings of the Company. The diversion of funds of the Company by promoter entities reflects a culture of weak internal control, where even ring-fenced borrowings from institutional creditors were rerouted at the total discretion of the promoters. The internal controls at Gensol appear to be loose and through the quick layering of transactions, funds have seamlessly flowed to multiple related entities/individuals. 92. The promoter holdin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der shall submit a Report to SEBI within six months from the date of appointment. 98. The foregoing prima facie observations contained in this Order are made on the basis of the material available on record. The concerned Noticees may, within 21 days from the date of receipt of this Order, file their reply/objections, if any, to this Order and may also indicate whether they desire to avail an opportunity of personal hearing on a date and time to be fixed in that regard. 99. The above directions shall take effect immediately and shall be in force until further orders. 100. A copy of this Order shall be served upon Entities, Stock Exchanges, RTAs and Depositories for necessary action and compliance with the above directions. ============= Document 1 Mar 2013 Ma 2014 2015 2018 2017 2018 2019 2020 2021 Ma 2022 2021 2024 TTM Sales . 1 5 3 12 61 64 79 60 154 371 1,152 1.297 Expenses . 1 11 71 73 55 130 295 979 Operating Profit 0 0 -1 1 2 6 2 5 17 70 20 318 OPM % -23% 5% 3% 10% 8% 11% 20% 18% 25%% Other Income . 0 O 1 1 3 1 4 17 Interest 0 0 0 0 O 1 1 1 5 101 137 Depreciation 0 0 O O O 1 1 1 25 72 28 Profit before tax 0 0....
X X X X Extracts X X X X
X X X X Extracts X X X X
....-44 Enut Court, fel Floor, Lachi Rond, N/7/02/2 MIONI + Designation: SR. Minage Signature with stamp: Document 6 पावर फाइनेंस कॉरà¥à¤ªà¥‹à¤°à¥‡à¤¶à¤¨ लिमिटेड POWER FINANCE CORPORATION LTD. ----- (A Govt of india Undertaking) (ISO 45001:2018 Certified) Date: 270 February 2025 Kind Attn: WHOMSOEVER IT MAY CONCERN Sub: Conduct Letter With reference to Gensol Engineering Limited ("Company"), we confirm that there are No Overdues, Unpaid Installments of Delays in the Term Loans and the conduct of the account is and remained Standard and Regular. This letter has been issued at the specific request of the Company. For PFC Designation: Deputy General Manager Signature with stamp santa arte . "[i) *. .. - mini -, - / -§ foot -- 110001 TRUIPY : 011-23400000 de0 : 017-23412545 Hogd. Office : "Linjanadtu", 1, Barakhsambia Lane, Connaught Place, New Delhi-110001 Phone : 011-23456000 Fax : 013-23412545 temdit/ website : wwwphimtis.com . CIN : L68910DL1986GOI024062 Document 7 Indian Renewable Energy Development Agency....