At the heart of the controversy is the alleged misutilisation of term loans availed by GEL from IREDA and PFC

PTI New Delhi

Gensol Engineering's (GEL) promoters treated the listed company as a proprietary firm, diverting corporate funds to buy a high-end apartment in The Camellias, DLF Gurgaon, splurging on a luxury golf set, paying off credit cards, and transferring money to close relatives, Sebi revealed in its interim order.

At the core of Sebi's findings is an alarming pattern of fund diversion by Gensol's promoters -- Anmol Singh Jaggi and Puneet Singh Jaggi -- pointing to governance failures within the company. At the heart of the controversy is the alleged misutilisation of term loans availed by GEL from IREDA and PFC.

According to Sebi, the company secured a total of Rs 977.75 crore in loans, of which Rs 663.89 crore was meant specifically for the purchase of 6,400 EVs. EVs were procured by the company and subsequently leased to BluSmart, a related party. However, in a response submitted to Sebi in February, Gensol admitted that it had procured only 4,704 EVs till date -- far less than 6,400 for which it had received funding.

This was corroborated by Go-Auto Pvt Ltd, the EV supplier, which confirmed delivering 4,704 units to the company for a total consideration of Rs 567.73 crore. Given that Gensol was also required to provide an additional 20% equity contribution, the total expected outlay for the EVs was around Rs 829.86 crore. By that calculation, Rs 262.13 crore remains unaccounted for.

To trace the end-use of the funds, Sebi analysed bank statements of both Gensol and Go-Auto. Sebi found that in many instances, funds transferred to Go-Auto ostensibly for EV purchases were routed back to Gensol or to entities linked to Anmol and Puneet either directly or indirectly.