NCLAT refuses to lift asset freeze on Gensol Engineering, related firms

NCLAT directs Gensol Engineering and related entities to approach the NCLT for relief after denying plea to lift freeze on assets, accounts, and lockers amid fraud probe

The National Company Law Appellate Tribunal (NCLAT) on Wednesday refused to lift the freeze on assets, bank accounts, and lockers of Gensol Engineering and its related entities. The appellate tribunal directed the company to approach the National Company Law Tribunal (NCLT) for relief on the matter.

 

Last week, the Ahmedabad bench of the NCLT had allowed a plea by the Ministry of Corporate Affairs seeking an asset freeze on Gensol Engineering and 37 related entities, following allegations of corporate fraud and misgovernance. 

“On perusal of the materials placed on record, this Tribunal notes serious allegations of fraudulent conduct, including diversion of company funds by the promoters of Gensol Engineering (Respondent No. 1) and related entities, violation of corporate governance norms, manipulation of financial statements, default in loan repayments despite false declarations, and illegal alienation of company assets,” the NCLT said in its order.

 

In their plea before the NCLAT on Wednesday, BluSmart Premium Fleet and Matrix Gas and Renewables said they were unable to pay salaries to employees and meet other operational expenses due to the account freeze ordered by the NCLT.

 

Separately, on Tuesday, the Ahmedabad bench of the NCLT, while hearing pleas filed by three debenture holders—Spectrum Trimpex, Catalyst Trusteeship, and Equentia Financial Services—issued notices to Gensol Engineering and BluSmart Mobility, seeking their responses.