ED Registers Case Against Gensol Promoters Over Alleged Fund Irregularities, Co-Promoter Puneet Jaggi Detained

The raids were conducted at different premises of the company, which include Gurugram, Delhi, and Ahmedabad, under the provisions of the Foreign Exchange Management Act (FEMA). 

The Enforcement Directorate (ED) on Thursday registered a case against the promoters of Gensol Engineering Ltd during its investigation into alleged financial irregularities at the company. The co-promoter, identified as Puneet Singh Jaggi, has been detained from a Delhi hotel, official sources said.

The raids were conducted at different premises of the company, which include Gurugram, Delhi, and Ahmedabad, under the provisions of the Foreign Exchange Management Act (FEMA), according to a report by PTI.

Anmol Singh Jaggi and Puneet Singh Jaggi, the promoter brothers of the company, are under the scrutiny of the investigative agency after a SEBI report for alleged financial misconduct, diversion of funds, and corporate misgovernance. Sources also indicated that Anmol Jaggi is stated to be in Dubai.

BluSmart Mobility, Jagg brothers' another company, runs cabs under the brand name BluSmart, which provides electric cab services in Delhi-NCR, Mumbai, and Bengaluru. Bookings were halted since the report of the Securities and Exchange Board of India (SEBI) surfaced.

The brothers were also barred by the markets regulator from accessing the securities market until further notice.

According to sources, the wives of the two brothers involved in the case have been located in Pune, Maharashtra, while Enforcement Directorate (ED) officials have visited their residences in The Camellias, DLF Gurugram, and a site in Ahmedabad.

The ED is preparing to initiate a money laundering case against the company’s promoters after the Delhi Police’s Economic Offences Wing (EOW) registers an FIR, based on complaints filed by the Indian Renewable Energy Development Agency (IREDA) and Power Finance Corporation (PFC), sources added.

The ED’s action follows a SEBI order stating that Gensol Engineering secured loans from PFC and IREDA Ltd for acquiring electric vehicles (EVs) and undertaking engineering, procurement, and construction (EPC) contracts.

However, sources allege the company diverted the funds from their intended purposes and instead used them to purchase assets in the names of the promoters, their relatives, or in various shell entities linked to the group. The agency has reportedly identified such assets and noted that some of the misused funds were also used to acquire foreign currency.

Gensol Engineering’s Promoters Misused The Company As Personal

As per the sources, Gensol has floated multiple companies outside India, including in Dubai and the US. The ED is also probing the allegations against Ajay Aggarwal of Go Auto Pvt Ltd, the Tata e-vehicles distributor, involved in assisting Gensol in diverting the funds of the loan instead of using it for the supply of EVs.

Central to the ED probe are revelations from SEBI’s interim order, which alleges that Gensol Engineering’s promoters misused the company as if it were their personal enterprise. According to the order, they diverted corporate funds for personal luxuries, including purchasing a premium apartment at The Camellias in DLF Gurugram, buying an expensive golf set, settling credit card dues, and transferring money to close family members.

SEBI observed that the promoters were treating the publicly listed firm like a personal piggy bank, channeling funds to related entities and making expenditures with no consideration for shareholder interests.

Such financial mismanagement, SEBI warned, could eventually result in these diversions being written off the company’s books, leading to potential losses for investors. Gensol Engineering, which is listed on both the BSE and NSE, operates in the solar consulting and EPC sector and is also involved in electric vehicle leasing.