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Gensol Faces Expanded Government Scrutiny Over EV Loan Misuse

The Ministry of Corporate Affairs has launched an inquiry into Gensol Engineering's alleged diversion of state-backed loans, with a decision on a formal probe expected soon.

Recently, SEBI flagged issues related to alleged fund diversion and document falsification against Gensol Engineering Ltd, which impacted BluSmart, leading to the closure of services of the company.
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Overview

  • SEBI has barred Gensol Engineering promoters Anmol and Puneet Jaggi from capital markets and ordered a forensic audit of the company.
  • Approximately ₹262 crore of the ₹977.75 crore in state-backed loans meant for EV procurement remains unaccounted for, with funds allegedly diverted for personal and unrelated uses.
  • BluSmart Mobility, a related entity of Gensol, has suspended operations in key cities, citing fallout from SEBI's findings.
  • The Ministry of Corporate Affairs has initiated a suo motu inquiry into Gensol, examining potential corporate governance violations and financial irregularities.
  • State lenders PFC and IREDA are under criticism for failing to monitor the end-use of funds, allowing misuse through falsified documents and layered transactions.