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Gensol Hits Lower Circuit: Shares of struggling Gensol Engineering were locked in a 5% lower circuit on Thursday at Rs 60.45 on the BSE
Gensol Shares Fall
Gensol Engineering Share Price: Shares of struggling Gensol Engineering were locked in a 5% lower circuit on Thursday at Rs 60.45 on the BSE, marking the 20th consecutive day of decline. The sharp drop follows the Securities Appellate Tribunal’s (SAT) decision to deny interim relief to the company, which is under investigation for alleged fund diversion.
The Securities Appellate Tribunal (SAT) on Wednesday declined to stay a Securities and Exchange Board of India (Sebi) order dated April 15, which barred Gensol Engineering and its promoters from accessing the securities market. Sebi has accused the company of serious lapses, including fund diversion, submission of forged documents, and misuse of investor funds.
Gensol Disputes Sebi’s Urgency
Challenging Sebi’s directive, Gensol argued that the order was passed without affording the company a hearing, resulting in severe business disruptions. The firm claimed that the freeze on its demat account and the imposition of a forensic audit had led to contract cancellations and increased the risk of its assets turning into non-performing assets (NPAs).
SAT Issues Timeline for Response
The tribunal has now directed Gensol to file its response within two weeks and instructed Sebi to deliver a final order within four weeks post-hearing. During the hearing, Gensol also appealed for relief from the forensic audit and sought to have its demat account unfrozen.
Sebi, however, countered that the company used forged documents on fake bank letterheads to mislead regulators, credit agencies, and investors.
Alleged Fund Diversion and Loan Fraud
The case centers on a Rs 978 crore term loan from the Indian Renewable Energy Development Agency (IREDA) and Power Finance Corporation (PFC) meant for the procurement of 6,400 electric vehicles (EVs) to be leased to BluSmart Mobility, an affiliate of Gensol. However, only 4,700 EVs were reportedly bought at a cost of Rs 567 crore, leaving Rs 262 crore unaccounted for.
Sebi alleges that the remaining funds were funneled into unrelated luxury real estate purchases and to entities linked to the promoters.
Regulatory Action Intensifies
Ireda and PFC have lodged complaints with the Economic Offences Wing, stating that Gensol submitted falsified repayment certificates—claims that the lenders have denied. Sebi has verified that these documents were indeed forged.
Separately, the Ministry of Corporate Affairs has opened an investigation into Gensol and BluSmart Mobility. Sebi has also barred promoter Anmol Singh Jaggi from holding executive roles in any listed firm during the probe.
Gensol’s stock has nosedived, plummeting 59% in the past month and 18.5% this week alone. The shares dropped another 5% on Wednesday, closing at Rs 63.63 on the BSE.
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