SAT denies interim relief to Gensol in Sebi fraud case, reply due in 2 wks

SAT has asked Gensol to respond to Sebi's charges within two weeks even as MCA and EOW intensify scrutiny into alleged fund diversion and forged documentation

The Securities Appellate Tribunal (SAT) on Wednesday declined to grant interim relief to Gensol Engineering, which was under scrutiny for alleged fund diversion. 

 

The company had challenged an order by the Securities and Exchange Board of India (Sebi), dated April 15, that barred Gensol and its promoters from the securities market over accusations of fraudulent practices.  

 

Legal sources confirmed that SAT has directed Gensol to file its reply to Sebi within two weeks, and asked the regulator to pass a final order within four weeks after giving a hearing opportunity to Gensol. 

 

 In its plea, Gensol questioned the urgency in the matter for passing an interim order without a hearing opportunity and submitted that the order had caused ‘tremendous loss of business’ and is facing ‘cancellation of contracts’. Further, the order will lead to lending defaults, leading to NPA.

 

 

During the hearing, Gensol also requested a stay on the forensic audit and removal of the freeze on the company’s demat account.

 

The counsel for Sebi argued that the company had forged documents using the letterheads of the lenders while making submissions to the regulator. Meanwhile, the Ministry of Corporate Affairs (MCA) has also initiated a probe into Gensol and its affiliate, BluSmart Mobility.  

 

Gensol secured a ₹978 crore term loan from state-run lenders Indian Renewable Energy Development Agency (Ireda) and Power Finance Corporation (PFC), of which ₹ 664 crore was earmarked for purchasing 6,400 electric vehicles (EVs) to be leased to BluSmart. However, the company acquired only 4,700 EVs for ₹567 crore.  

 

Sebi alleged that the remaining funds were diverted for unrelated purposes, including high-end real estate purchases and transactions benefiting promoter-linked entities. Nearly ₹262 crore remains unaccounted for, even a year after the last loan disbursement.  

 

Ireda and PFC have filed complaints with the economic offences wing, accusing Gensol of submitting falsified documents. Sebi claims the company provided forged lender certificates, claiming timely debt repayments, to mislead regulators, rating agencies, and investors. Both lenders denied issuing such letters, revealing multiple defaults by Gensol.  

 

The case came to light after rating agencies downgraded Gensol following reports of defaults by BluSmart Mobility. Sebi has barred promoter Anmol Singh Jaggi from holding key positions in listed firms pending further investigation.