Jaggi Brothers Face Greater Consequences as Gensol Scam Unravels
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Synopsis
The Jaggi brothers of Gensol Engineering face severe repercussions from SEBI investigations revealing fraudulent activities, including submission of false documents to secure loans, leading to significant financial implications.
Key Takeaways
- SEBI's investigation uncovers fraudulent documents submitted by the Jaggi brothers.
- Loans totaling Rs 978 crore were misused for personal gain.
- Gensol's planned stock split has been suspended.
- Inadequate financial controls allowed for misuse of funds.
- SEBI findings show no manufacturing activity at the Pune plant.
New Delhi, April 20 (NationPress) The Jaggi brothers, the promoters of the troubled Gensol Engineering, are encountering serious repercussions beyond just being excluded from stock markets. Recent investigations by the Securities and Exchange Board of India (SEBI) have uncovered that they allegedly submitted fraudulent documents to the government-owned Indian Renewable Energy Development Agency (IREDA) and the Power Finance Corporation (PFC) to obscure defaults and secure new credit.
The SEBI indicated that these misrepresentations could result in significant financial losses for shareholders, prompting a suspension of Gensol's planned stock split.
A senior official mentioned that the ongoing investigation may necessitate a more in-depth examination to ascertain any misconduct by other officials and whether adequate due diligence was conducted.
The loans, totaling Rs 978 crore, were acquired from government entities such as the IREDA and PFC. These funds were intended for purchasing electric vehicles (EVs) for BluSmart, Gensol's ride-hailing service. However, over Rs 200 crore was redirected through a car dealership to other businesses associated with the promoters, with portions spent on luxury items, including apartments in DLF Camellias, where prices start at Rs 70 crore.
According to SEBI, since Gensol was expected to provide a 20 percent equity contribution, the total expenditure should have been Rs 829.86 crore, leaving Rs 262.13 crore unaccounted for.
On April 15, the SEBI released a comprehensive interim order detailing the mismanagement at Gensol. The order indicated that the Jaggi brothers, specifically Anmol and Puneet Singh Jaggi, treated the company as their personal 'piggy bank'. There were insufficient financial controls, and loan funds were diverted to personal or related entities.
From FY22 to FY24, Gensol secured loans worth Rs 977.75 crore from the IREDA and PFC, of which Rs 663.89 crore was earmarked for acquiring 6,400 EVs. Nevertheless, the company acknowledged purchasing only 4,704 vehicles, valued at Rs 567.73 crore, as confirmed by supplier Go-Auto.
The SEBI investigation also disclosed that there was no manufacturing activity at Gensol Engineering Ltd’s EV facility in Pune, with only a handful of laborers present at a leased site.
This site inspection followed Gensol's announcement on January 28, 2025, regarding receiving pre-orders for 30,000 units of its newly introduced EVs, showcased at the Bharat Mobility Global Expo 2025. However, the SEBI's review unveiled that these were merely Memoranda of Understanding (MoUs) with nine entities for 29,000 vehicles, indicating that the company was misleading investors.
BluSmart Mobility was established in January 2019 in Gurugram by Anmol Singh Jaggi, Puneet Singh Jaggi, and Punit K. Goyal. Initially, it secured $3 million in angel investments from notable backers including Hero MotoCorp, Jito Angel Network, and Micromax.
It has now become evident that the startup used its green credentials to orchestrate a significant fraud that has sent shockwaves through the financial community.
