How Gensol’s Promoters Misused Company’s Funds For Personal Use?

The Securities and Exchange Board of India (SEBI) has restricted Gensol Engineering Ltd (GEL) and its promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, from entering the securities markets until further notice. The promoters are accused of misusing the company’s funds for their personal.

The regulator issued a 29-page interim order on Tuesday, 15 April 2025, restricting the two promoters from holding any key managerial or directorial roles in the company till the investigation ends. SEBI also directed Gensol to suspend its recently introduced stock split.

Where Gensol’s Funds Were Allegedly Misused?

As per the order issued by SEBI, the two promoters diverted the company’s funds through the entities linked to them and used the money for their Personal benefits. Around Rs 42.94 crore from a larger loan borrowed by Gensol was utilised by promoter Anmol Singh Jaggi to buy a luxury apartment in DLF Camellias. He also spent Rs. 50 lakh from the misused funds to invest in Ashneer Grover’s startup, Third Unicorn and for incurring his personal expenses, including travel.

After reviewing the bank statements of Puneet Singh Jaggi, it was found that a major part of the funds received from Wellray worth Rs. 13.55 crore was forwarded to his family members or related parties or was used for his personal benefit. Various transactions seemed to be personal expenses, such as buying foreign currency amounting to Rs. 66.36 lakh, payment made towards Express cards amounting to Rs. 49 lakh, and over Rs. 18 lakh in transfers linked directly to himself.

When did SEBI start inspecting Gensol?

SEBI began its investigation after receiving a complaint in June 2024, which raised concerns about share price manipulation and misuse of the company’s funds. SEBI’s probe uncovered that there was clear early evidence that the Jaggi brothers, who are the main promoters, diverted company money for their personal benefit.

As per the order, the loan funds received for buying electric vehicles were instead funnelled through different transactions and were finally used to buy a luxurious apartment. Gensol had taken a loan from the Indian Renewable Energy Development Agency (IREDA), and this fund was sent to Go-Auto Private Ltd. Out of this, Rs. 50 Crore was forwarded to CapBridge Ventures LLP. This company was heavily influenced by both the promoters. Around Rs. 42.94 crore was eventually paid to DLF for a posh apartment in The Camellias, Gurugram.

The company has been accused of illegally submitting fake letters issued by its lenders to mislead not only SEBI but also credit rating agencies, banks, and investors.

Refer to the official interim order for more information.