The Securities and Exchange Board of India (SEBI) is likely to investigate the affairs of solar EPC company Gensol Engineering Limited (GEL).

“SEBI is concerned about issues of corporate governance, especially the related-party transactions and submission of alleged falsified debt servicing documents to rating agency ICRA,” a person aware of the matter said, Moneycontrol.com reported.

“SEBI may also investigate the company from a funds diversion angle,” the person added. According to a source, SEBI is also scrutinising disclosures made and is likely to look into the accounting practices of the company and associates. The steep rise in its balance sheet may also be examined. GEL has reported a compound annual growth of 52.1 percent in its profit over the last five years.

Moneycontrol has written to Gensol Engineering seeking comments but no response was received. SEBI also did not share any comment on the queries related to Gensol Engineering. It is worth noting that SEBI as a policy usually avoids commenting on individual company-related queries. Besides, the allegations of falsified debt servicing documents, the other  key concern is linkage of GEL with BluSmart which runs a fleet of electric cabs on call.

The companies share the same promoters, Anmol Singh Jaggi and Puneet Singh Jaggi. BluSmart’s business model differed from that of other taxi aggregators in that it outrightly owned the cars in its fleet. To purchase the EV fleet it took loans from two energy sector PSU NBFCs. 

Rating agencies CARE and ICRA both downgraded the GEL’s loan facilities to D or in simple terms junk/default grade, after feedback from lenders to the company. 

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