The ministry of corporate affairs (MCA) is aiming to conclude the probe on Gensol Engineering and its related entities in three to five months, said a senior official on Monday. Based on the findings of the investigation, the ministry will take further steps, including assessing the need to refer the case to the Serious Fraud Investigation Office (SFIO), the official said.
In early May, the MCA launched a probe against Gensol Engineering and its affiliate firms like BluSmart Mobility for alleged violation of corporate governance norms under section 210 of the Companies Act which gives powers to the central government to investigate into the affairs of a company. The MCA investigation, which is being carried out by the registar of companies (RoC), is focussing on the alleged misappropriation of funds that were highlighted in the Securities and Exchange Board of India (SEBI’s) interim report on Gensol in April.
Besides MCA, the Enforcement Directorate (ED), and the Institute of Chartered Accountants of India (ICAI) have been probing Gensol’s alleged misconduct from various aspects. The ED had raided two premises of Gensol in April under the provisions of the Foreign Exchange Management Act (FEMA). At the same time, the National Financial Reporting Authority (NFRA) is examining the role of statutory auditors of the company.
Earlier this month, the Securities Appellate Tribunal (SAT) refused to stay the market regulator’s interim order. It also asked Gensol to file its reply and directed the SEBI to pass the final order within four weeks of the firm’s hearing. Apart from its own investigation, the SEBI has also appointed Raju and Prasad Chartered Accountants to conduct forensic audit of Gensol’s financial statements between FY22 and FY25, and submit the findings in six months.
The mounting pressure on Gensol has led to the resignations its promoters Anmol Singh Jaggi and Puneet Singh Jaggi recently who cited the reason for their exit to the SEBI’s interim order. On April 15, SEBI barred the promoters of Gensol from holding any key managerial positions in the company besides restraining them from dealing in the securities market over alleged involvement in fraudulent activities.
In its order, SEBI said that Gensol attempted to mislead the agency, credit rating agencies (ICRA and CARE), lenders and investors by submitting forged conduct letters purportedly issued by its lenders IREDA and Power Finance Corporation. IREDA has filed an insolvency plea against Gensol claiming a default on a Rs 510-crore payment.