The Securities and Exchange Board of India has issued an interim order against Gensol Engineering Ltd and its promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, citing financial misconduct, diversion of funds, and weak governance systems.

The action follows SEBI’s investigation, which was initiated after complaints regarding share price manipulation and delays in loan repayments. Gensol Engineering, headquartered in Ahmedabad, is listed on the main boards of BSE and NSE following its earlier presence on the SME platform.

SEBI noted that Gensol Engineering raised ₹9.75 billion in loans from IREDA and PFC for the procurement of 6,400 electric vehicles. The company procured 4,704 vehicles. SEBI’s review of financial transactions showed that over ₹2.00 billion was transferred through a dealer, Go-Auto, and subsequently routed to companies connected to the promoters. Part of the money was used for real estate transactions and other unrelated expenditures.

SEBI also found that the company submitted false “No Default” statements to credit rating agencies, despite missing payment deadlines. The order refers to disclosures made by the company about pre-orders and overseas deals, which lacked proper documentation or execution.

The regulator stated that the promoters treated the company as a personal entity, using its funds for activities not aligned with its stated objectives. Transactions involving related parties such as Wellray Solar were found to include repeated fund transfers. Wellray, funded by Gensol and associated entities, conducted trading in the company’s own stock.

SEBI has issued interim directions restraining the promoters from holding any directorial or key managerial positions. It has also barred Gensol Engineering, its promoters, and linked entities from buying or selling securities. The proposed 1:10 stock split has been put on hold to prevent further exposure to retail investors.

SEBI has stated that it will appoint a forensic auditor to examine the books of Gensol Engineering and its related parties. The review will cover financial records, fund flows, and compliance with disclosure norms. The audit is expected to assist in determining the full scope of the financial issues identified.