ICAI To Investigate Gensol Engineering, BluSmart Mobility's Financial Records For FY24

This move comes amid regulatory concerns surrounding the two companies and was confirmed during a meeting of the Financial Reporting Review Board (FRRB) on Wednesday.

Gensol Engineering has been facing regulatory heat following serious allegations of financial misconduct.

Source : Freepik

The Institute of Chartered Accountants of India (ICAI) has decided to examine the financial records of Gensol Engineering Ltd and BluSmart Mobility Pvt Ltd for the financial year 2023-24.

This move comes amid regulatory concerns surrounding the two companies and was confirmed during a meeting of the Financial Reporting Review Board (FRRB) on Wednesday, ICAI President Charanjot Singh Nanda told PTI.

Gensol Engineering has been facing regulatory heat following serious allegations of financial misconduct. The Securities and Exchange Board of India (Sebi) recently issued a ban on the company’s promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, barring them from participating in the securities market due to multiple violations. Anmol Singh Jaggi also happens to be the promoter of BluSmart Mobility, a ride-hailing service.

Regulatory Attention Heightens Over Alleged Financial Misconduct

“The FRRB has decided to undertake review of the financial statements and the statutory auditor's report of Gensol Engineering and BluSmart Mobility for the financial year 2023-24,” Nanda said.

The FRRB evaluates company financial statements to check for adherence to Accounting Standards, Standards on Auditing, and compliance with Schedule II and III of the Companies Act, 2013. It also reviews adherence to auditing and accounting guidance notes, in addition to circulars and directions issued by the Reserve Bank of India (RBI).

Should the board uncover major accounting discrepancies or irregularities in the course of its review, the findings may be escalated to the ICAI's Director Discipline. In such cases, the matter may also be forwarded to the appropriate regulatory authorities for further action.

SEBI's action against Gensol’s promoters, announced on April 15, followed accusations that loan funds were siphoned off from the publicly listed company for personal use. These developments have sparked concerns about corporate governance and possible misuse of company resources.

Corporate Affairs Ministry Weighs Further Steps

On April 21, the corporate affairs ministry stated that it will evaluate the capital markets regulator's order before determining its course of action regarding Gensol Engineering. The ministry, which enforces the Companies Act, 2013, has the authority to intervene in matters involving corporate misconduct.

Potential measures by the ministry could include an inspection of the company’s records by the Registrar of Companies (RoC). If further irregularities are detected, the matter could be handed over to the Serious Fraud Investigation Office (SFIO) for a full-fledged investigation.