Shares of Gensol Engineering Ltd (GEL) hit a 5% lower circuit on Thursday, following a damning interim order by the Securities and Exchange Board of India (SEBI) that revealed serious financial irregularities and barred the company’s promoters from participating in the securities market.
The market regulator accused the promoters of treating company funds as a “proprietor’s piggy bank”, citing the misuse of ₹977 crore raised from IREDA and PFC for the purchase of over 6,400 electric vehicles. According to the SEBI order, only a fraction of the funds were used for the intended purpose, while the rest were funneled into subsidiaries through complex, layered transactions. The diverted funds were allegedly used for personal luxuries, including real estate acquisitions.
SEBI also pointed out that the promoters submitted falsified documents to credit rating agencies. This deception ultimately led to a downgrade in Gensol’s credit rating—from BB+ to “default”.
Adding to the turmoil, the company’s independent director Arun Menon resigned with immediate effect on Wednesday night. In his resignation letter, Menon expressed concern over Gensol’s growing debt burden and the apparent leveraging of its balance sheet to fund unrelated business ventures. He also claimed the promoter, Anmol Jaggin, ignored multiple attempts at communication and requested him to delay his resignation until the IPO of subsidiary Matrix was complete.
Once trading at ₹1,376 in February 2024, Gensol’s stock has seen a staggering decline of over 90%, now languishing at ₹116 per share on the NSE. The ongoing crisis has not only shaken investor confidence but also highlighted serious issues in the company’s corporate governance.
