Gensol Engineering admitted to insolvency by NCLT on Ireda petition

Ireda called for immediate oversight, stating Gensol had essentially become 'headless' following the departure of its senior leadership during the regulatory investigation

Don't want to miss the best from Business Standard?

The Ahmedabad bench of the National Company Law Tribunal (NCLT) has admitted Gensol Engineering Limited to Corporate Insolvency Resolution Process (CIRP) on a petition filed by the Indian Renewable Energy Development Agency (Ireda), according to a report from Bar and Bench. 

Ireda seeks urgent oversight  Ireda stated on May 14 that it had initiated insolvency proceedings. Ireda urged immediate oversight of Gensol, arguing that the company had effectively become "headless" following the exit of its top leadership during continuing regulatory scrutiny.  Since then, multiple other financial creditors have also filed for insolvency against the company.

 

An interim resolution professional (IRP) will take over management of Gensol and establish a committee of creditors (CoC) to evaluate resolution plans. If no plan is approved within 180 to 330 days, the company could be liquidated. 

   

NCLT orders asset freeze  Earlier, the NCLT's Ahmedabad bench had approved a request from the Ministry of Corporate Affairs to freeze the assets, bank accounts, and lockers of Gensol Engineering and 37 related entities, following accusations of corporate fraud and mismanagement.

 

The National Company Law Appellate Tribunal (NCLAT) has declined to unfreeze the assets, bank accounts, and lockers of Gensol Engineering and its associated entities.    

This follows an investigation by the Securities and Exchange Board of India (Sebi) into Gensol Engineering, a firm associated with BluSmart, which allegedly misused over ₹200 crore allocated for purchasing electric vehicles.

 

Sebi has prohibited BluSmart promoters Anmol Singh Jaggi and Puneet Singh Jaggi from holding board positions and accessing the securities market, accusing them of diverting vehicle financing loans to real estate transactions. 

₹262 cr diverted from EV loan funds 

Sebi has alleged that around ₹262 crore – part of the ₹978 crore in loans given to Gensol Engineering by Ireda and Power Finance Corporation (PFC) – was misused. The funds were meant for the purchase of 6,400 electric vehicles (EVs) to be leased to BluSmart, but only 4,704 EVs were bought. According to Sebi, the money was routed through Go-Auto Pvt Ltd, Gensol’s EV supplier, and diverted to companies controlled by the Jaggi brothers.