The Ahmedabad bench of the National Company Law Tribunal (NCLT) on Friday admitted a corporate insolvency plea against Gensol Engineering Ltd (GEL) and Gensol EV Lease (GEVL), which was filed by the Indian Renewable Energy Development Agency (Ireda) for a loan default of Rs 510 crore.
The bench of Judicial Member Shammi Khan and Technical Member Sanjeev Kumar passed the order under Section 7 of the Insolvency and Bankruptcy (IBC) code, following which an interim resolution professional (IRP) will take control over GEL’s management and establish a committee of creditors (CoC) to evaluate resolution plans. It is said that if no resolution plan is approved within 180 to 330 days, the company will be liquidated. A copy of the order is awaited.
While the Ireda had nominated a different IRP, the bench said, “The insolvency plea is admitted. However, we are not appointing the RP suggested by Ireda, we have chosen from the list given by the Insolvency and Bankruptcy Board of India (IBBI).”
An additional hearing against GEVL’s alleged loan default of Rs 218.95 crore concluded with the bench admitting Ireda’s plea and appointing the same IRP for both companies.
Ireda’s insolvency petition against GEL was initiated on 14 May, when it moved the tribunal for an immediate oversight of the company, arguing that GEL had become “headless” since the exit of its leadership, Anmol Singh Jaggi and Puneet Singh Jaggi, during the regulatory scrutiny.
Furthermore, the NCLT on 28 May ordered the freezing of the bank and demat accounts, restrained trading of securities and directed asset disclosures of GEL, along with 16 other companies and their promoters. The bench also admitted a petition filed by the Union of India through the Ministry of Corporate Affairs (MCA) against GEL and its affiliated entities under Sections 241, 242 and 246 read with Section 339 of the Companies Act, citing grave violations of corporate governance norms, diversion of funds and financial misstatements.
Following the admittance of the plea, GEL’s stock has hit the lower circuit, closing at Rs 49.38, falling by 2% from yesterday’s close of Rs 50.39.The alleged misappropriation of funds at GEL is currently being probed by various agencies, including Sebi, registrar of companies at MCA, enforcement directorate, and NFRA.