Gensol Engineering Ltd shares fell by as much as 5%, hitting a yearly low on Wednesday, after Securities and Exchange Board of India (SEBI) alleged that its promoters had diverted company funds.
At 12:45 pm, the company's stock was down on the Bombay Stock Exchange (BSE) by 4.99% or by ₹6.50, hitting ₹123.65. The intraday low so far was also the same amount, which is also the 52-week low.
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What are the details of SEBI's order against Gensol's promoters?
SEBI had written in its order that the company had raised ₹975 crore in loans from institutions such as Indian Renewable Energy Development Agency (IREDA) and Power Finance Corporation (PFC) for purchasing electric vehicles (EVs) for its ride-hailing company BluSmart.
However, only a portion of the money was used for that purpose, with the remaining diverted for unrelated personal expenses, such as buying a luxury apartment in Gurugram and investing in other places, the order alleged
{{/usCountry}}However, only a portion of the money was used for that purpose, with the remaining diverted for unrelated personal expenses, such as buying a luxury apartment in Gurugram and investing in other places, the order alleged
{{/usCountry}}SEBI's order also claimed that ₹50 lakh was invested in Third Unicorn Pvt. Ltd, a tech start-up belonging to Ashneer Grover.
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As a result, SEBI barred promoter brothers Anmol Singh Jaggi and Puneet Singh Jaggi from directorships in listed companies, blocked the company's stock split, and named a forensic auditor to investigate the matter.
Credit rating agency ICRA also downgraded Gensol's credit rating after it was found that the company allegedly presented it with falsified debt track record documents, raising "concerns on its corporate governance practices, including its liquidity position.”
However, Gensol issued an investor release signed by CEO Anmol Singh Jaggi, categorically denying “any involvement in falsification claims.”
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"The internal controls at Gensol appear to be loose and through the quick layering of transactions, funds have seamlessly flowed to multiple related entities," SEBI said.