The Ahmedabad bench of National Company Law Tribunal (NCLT) took serious steps on Wednesday against Gensol Engineering Ltd, its related companies, and top executives, a report by CNBC said. The action was in response to major allegations of financial fraud, misuse of company funds, and breaking corporate rules.
Due to the seriousness of the case, several government agencies are now involved in the probe, including the Ministry of Corporate Affairs (MCA), SEBI, Serious Fraud Investigation Office (SFIO), RBI, and the Income Tax Department.
Allegations Against Gensol Promoters
The main people under investigation are Anmol Singh Jaggi and Puneet Singh Jaggi, who are promoters of Gensol. They are accused of diverting company money for personal use, creating false financial reports, selling or transferring assets without permission, failing to repay large loans, while claiming they had not defaulted.
The NCLT bench ordered the freezing of assets and bank accounts for 37 people and organisations connected to Gensol. This includes Gensol, its related companies, and its promoters and associates. The RBI and Indian Banks’ Association (IBA) have been told to freeze all bank accounts and lockers of these parties, the CNBC report said.
All 37 people and entities involved must now reveal details of their bank accounts and assets worldwide. This includes their movable assets like money and valuables, and immovable assets like property. The court has also banned Gensol and its partners from selling or mortgaging any assets, whether in India or in other countries.
The MCA has also been given permission to work with Indian embassies abroad to help enforce the court’s orders globally. The MCA will also notify stock exchanges (BSE and NSE) to stop Gensol and its promoters from trading shares. The Income Tax Department must provide full details of the assets held by the accused. CDSL and NSDL (which manage electronic securities) have been told to freeze all holdings of the accused.
Rs 975 crore loan misused?
The court noted that there is early evidence showing that up to Rs 975 crore in loans, which were meant for Gensol’s electric vehicle business, may have been misused or siphoned off. Regulators believe this is a case of large-scale corporate fraud with wide-reaching effects. The NCLT’s actions aim to protect public interest and ensure accountability, the CNBC report said.