The Gensol Engineering stock is in a tailspin. The share price of Gensol Engineering is hitting the lower circuit day after day. Once a darling of the stock market, Gensol Engineering has now turned into a cautionary tale. The company’s shares, which had touched a 52-week high of Rs 1,124.90, are now in freefall, everyday heading to a 52-week low, currently at Rs 51.25. In the last month alone, the stock has plunged nearly 60%.
Every trading session seems to bring a new lower circuit, with no sign of recovery. Let’s take a look at the recent highlights of the company-
Leadership shaken – Jaggi brothers step down after SEBI’s interim order
The storm intensified this week as Gensol’s top leadership exited. In a latest development, both the Managing Director Anmol Singh Jaggi and Whole-time Director Puneet Singh Jaggi resigned from their roles on May 12. This came after an interim directive by SEBI and the exit from the company is directly linked to the regulatory action.
What are the allegations raised by SEBI?
The major controversy of this ongoing tail is SEBI’s allegation that the Jaggi brothers misused a massive Rs 978 crore loan meant for acquiring electric vehicles.
The funds were sanctioned by IREDA and PFC to Gensol Engineering for leasing vehicles to BluSmart Mobility. But, as per the market regulator, only 4,700 of the 6,400 planned vehicles were actually procured. The rest of the remaining funds were allegedly diverted with some towards luxury real estate, and the other into entities linked to the promoters themselves.
The woes continues: Multiple agencies on the case
This is also important to note that, is not only SEBI that is tightening the screws. On the parallel side, adding to the company woes, the Ministry of Corporate Affairs has also launched an investigation.
IREDA and PFC have also lodged complaints with the Economic Offences Wing, accusing Gensol of submitting fake repayment certificates to banks and regulators. SEBI has gone as far as freezing the promoters demat accounts and barring Anmol Jaggi from taking executive positions in any listed firm until the probe is over.
Furthermore, during the SAT hearings, the company argued that the market regulator SEBI acted without hearing its side and claimed business loss due to the regulatory clampdown. But SAT refused to stay the order, and SEBI now has four weeks to deliver its final verdict. Meanwhile, Gensol must submit its reply within two weeks.