TaxTMI 
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2025 (7) TMI 646
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....et 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 December 2024 is given below (Source: Screener.in....
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..... 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 Certificate (NOC) purportedly issued by its (Gensol) lenders. 19. However, upon seeking confirmation from IREDA an....
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....ial 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 IREDA 71.41 5. 2022-23 IREDA 53.56 6. 2022-23 IREDA 43.69 7. 2022-23 PFC 117.47 8. 2023-24 PFC 117.47 9. 2023-24 PFC 117.47 10. 2023-24 IREDA 192.87 For carrying out EPC works 11. 2023-24 IREDA 121.00 Total 977.75 ....
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.... 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. Ltd. and Puneet Singh Jaggi till March 2020. Lalit Solanki, a former employee of Gensol, is now the majority shareholder. No 5. Prescinto Technologies Private Limited (Prescinto) Disclosed as related party of Gensol under the category "Under significant influence by KMP or their relative." Yes 6. Gensol Consultant Private Limited (Gensol Consultant) Anmol Singh Jaggi and Puneet Singh Jaggi are promoter Directors. Yes 7....
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.... 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. Matrix Gas and Renewables Ltd. (Matrix). The fund flow, as per the bank statements, is shown below: Movement of funds from Gensol to DLF Limited while booking apartment Movement of funds, after DLF returned the funds to Ms. Jasminder Kaur 38. Bank statements of Capbridge Ventures LLP further showed that it received Rs. 70 Crore in FY 2023 from Go-Auto: Rs. 50 Crore on October 03, 2022 which was partly utilized for acquiring the apartment in The Camellias, DLF; and another Rs. 20 Crore on December 31, 2022, which prima facie appea....
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....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 which originated from Go-Auto itself. It was noted that an amount of ≥ Rs. 8.5 Crore was circulated four times by Go-Auto, itself through Gensol on 28/11/2023 and 29/11/2023. Details are given below: Date From party Amount (Rs. in Crores) To party Amount (Rs. in Crores) To party Amount (Rs. in Crores) To party Amount (Rs. in Crores) 28/11/2023 Go Auto 8.5 GEL 8.5 Wellray 8.5 Go Auto 8.5 Solar 28/11/2023 8.5 8.5 8.5 8.5 103705 058605 &nb....
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....to, 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 Crores) To party Amount (Rs. In Crores) To party Amount (Rs. In Crores) Go Auto Gosolar Venture 058605 500461 Capbridge Ventures 9200200 64107731 Go Auto 103705 000861 04/01/2024 0679200 10 Gensol 10 10 10 10 0003065 EV Lease 04/01/2024 Go Auto 103705 000861 10 10 10 10 10 058605 04/01/2024 10 10 10 10 10 005018 04/01/2024 10 10 10 10 10 51. Capbridge transferred back additional Rs. 10 Crore using funds which it had received, from Gen....
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....uying EVs, bank statement analysis showed that it had transferred Rs. 775 Crore to Go-Auto against which it has obtained delivery of 4,704 EVs costing Rs. 567.73 Crore. 55. Ajay Agarwal, Managing Director of Go-Auto, in his statement recorded before SEBI on March 24, 2025, deposed that an amount of around Rs. 50 Crore was due from Gensol and therefore, Go-Auto would not be delivering anymore EVs to Gensol. 56. In this regard, Gensol has now submitted to SEBI in its communication dated April 05, 2025 that Go-Auto owes the Company an amount of Rs. 21.25 Crore as interest for which it has raised a debit note on the dealer. Interestingly, in the same letter, Gensol has noted that, on a consolidated basis, Gensol has a payable of Rs. 5.37 Crore to Go-Auto. 57. From the examination done by SEBI so far, it can be noted prima-facie that even after transferring Rs. 207.27 Crore (Rs. 775 Crore - Rs. 567.73 Crore) over and above the cost price of the 4,704 EVs that have been delivered to Gensol, the Company still had a payable of about Rs. 50 Crore to Go-Auto, as per the claim of MD of Go-Auto submitted under oath. This shortfall prima facie appears to be diversion of funds by Gensol to co....
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....e date of this Order 63. An analysis of bank statements of Gensol and Wellray revealed that that the actual transactions (payments and receipts) between Gensol and Wellray were much higher that the figures recorded in the ledgers of Wellray in the books of Gensol, the details of which are given in the Table below: Payments and Receipts reflected in the bank statement of Gensol Particulars FY23 (Rs. In Crores) FY24 (Rs. In Crores) Total (Rs. In Crores) Funds transferred by Gensol to Wellray Solar 215.89 208.25 424.14 Funds received back by Gensol from Wellray 166.94 143.25 310.19 64. Considering that a substantial portion of funds transferred between Gensol and Wellray did not correspond to the quantum of underlying commercial transactions, a detailed analysis was undertaken to examine the utilization of funds by Wellray. The prima facie findings is the said examination is detailed below: 65. Upon review of the bank statements of Wellray's account (A/c No. 058605002357 with ICICI Bank), it was observed that out of the amount of Rs. 424.14 Crore received from Gensol, as mentioned in para 63 above Rs. 382.84 Crore was transferred by Wellray to various other entities....
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....9,600 Anmol Singh Jaggi is a shareholder in Batx Energies Private Limited (holding 681 shares as of 31-03-2024) Third Unicorn Private Limited 50,00,000 Anmol Singh Jaggi is a shareholder in Third Unicorn Private Limited (holding 2000 shares as of 31-03-2024). TaylorMade 26,00,000 Appears to be related to purchase of golf set Capbridge Venture LLP 25,00,000 Designated Partners are Anmol Singh Jaggi and Puneet Singh Jaggi ICICI Securities 23,00,000 Appears to be for personal use Jabir Mahendi M 20,00,000 Jabir Mahendi M worked as CFO of GEL from 2019- to 2024 Titan Company 17,28,350 Appears to be for personal use DLF Homes 11,75,000 Appears to be for personal use Kamco Chew Food Pvt Ltd Spa 10,36,860 Appears to be for personal use ICICI Bank Credit Card 9,95,266 Credit Card payment. Appears to be for personal use. Mayo Design 8,00,000 Appears to be for personal use Shalmali Kaur Jaggi 6,00,000 Former Director of GEL and Gensol Consultants Private Limited and current director of Param Seva Foundation (disclosed related party by GEL). Make my trip 3,00,000 Appears to be for personal use Ali Imran Naqvi 1,50,000 Executive Director at G....
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....amounting to Rs. 10 Crore from Gensol in A/c. No. 058605002357 with ICICI Bank. The balance in the said bank account of Wellray prior to this transfer was Rs. 8,81,783/-. 74. A pictorial representation of the above movement of funds is given below: 75. Based on the above, it is prima facie observed that Gensol had provided funds, through layered transactions, to Gensol Ventures Private Limited (promoter of Gensol) for subscribing to 97,445 equity shares of Gensol. Trading in the scrip of Gensol Engineering Limited by Wellray 76. As stated in the earlier part of this Order, Wellray had utilised funds received from Gensol for trading in the Company's scrip. The details of the trades executed by Wellray for the period April 2022 to December 2024 were obtained from BSE and NSE and given in the Table below: Period Scrip Name Amount in Rs. Buy Value Sale Value April 2022 to December 2024 Reliance Infrastructure Limited 17,791 - Shyam Metallic & Energy Limited 4,628 - Tata Chemicals Limited 9,650 - Tata Motors Limited 25,306 - Mufin Green Finance Limited 71,23,530 15,22,963 Gensol Engineering Limited 160,51,05325 178,44,28,644 Total 161,22,86,230 178....
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....the shares of Gensol by Wellray, the latter made handsome gains from the transactions. Disclosures made by the Company 80. It was noted that the Company had made a disclosure dated January 28, 2025, to the exchanges that it had received pre-orders for 30,000 of its newly launched electric vehicles unveiled at the Bharat Mobility Global Expo 2025. However, when relevant documents were called for from the Company and examined it was noted that the Orders in question were Memorandum of Understandings (MOUs) entered with 9 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. 81. In this regard, representative of NSE visited the plant site of Gensol Electric Vehicle Private Limited located at Gat No. 877, Next to Mahindra Towers, Khed, Nighoje, Chakan, Pune - 410501 on April 09, 2025. 82. It was found during the visit 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 ....
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....rs. In view of these prima facie findings, the Noticees 1, 2 and 3 are alleged to have violated the provisions of Section 12A(a), (b) and (c) of the SEBI Act, 1992 and Regulations 3(b), (c) and (d), 4(1) and 4(2)(f), (k) & (r) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003. 88. Further, the above paragraphs in this Order have also shown how the promoters and their related parties / relatives benefitted from the funds of Gensol, a listed company, through layered transactions, such transactions qualified to be related party transactions in terms of Regulation 2(zc) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations, 2015). Accordingly, such transactions were required to be disclosed as per the provisions of Regulation 4 and 48 of the LODR Regulations, 2015 read with applicable accounting standards, which Gensol has allegedly failed to do. Need for Interim Directions 89. What has been witnessed in the present matter is a complete breakdown of internal controls and corporate governance norms in Gensol, a listed company. The promoters were running a listed public company as ....