Gensol Engineering Faces Insolvency Proceedings Over ₹5.10 Billion Default

The Ahmedabad bench of the National Company Law Tribunal on Friday issued a notice to Gensol Engineering Ltd. after Indian Renewable Energy Development Agency Ltd. filed an insolvency petition against the company, alleging a default of ₹5.10 billion.

The tribunal has scheduled the next hearing for June 3.

IREDA, the financial creditor, requested the immediate admission of its petition and sought the appointment of an interim resolution professional on the first date of hearing. The petitioner claimed Gensol’s board was defunct and the company was now “headless”. However, the tribunal declined to issue any such order without first hearing Gensol's side.

Last month, the Securities and Exchange Board of India said it was investigating Gensol Engineering and its promoters for allegedly diverting loans taken from Power Finance Corp. Ltd. and IREDA. SEBI issued an interim order restraining the company and its two promoter-directors, Anmol Jaggi and Puneet Singh Jaggi, from accessing the securities market or holding any directorial or key managerial role.

SEBI’s findings showed that ₹967 million of a PFC loan was allegedly diverted to entities linked to the promoters, in breach of the loan’s stated purpose. Separately, ₹375 million from a ₹1.71 billion loan to Gensol’s subsidiary Gensol EV Lease was found to be transferred to Anmol Jaggi. SEBI noted that this required further scrutiny.

Meanwhile, the Enforcement Directorate has conducted searches at Gensol's premises in Delhi, Gurugram, and Ahmedabad under the Foreign Exchange Management Act. Puneet Jaggi was detained from a hotel in Delhi during the raids.