The Ministry of Corporate Affairs (MCA) has initiated a suo motu probe into alleged irregularities in Gensol Electric, the subsidiary of Gensol Engineering, sources told CNBC-TV18 on April 22.
The probe comes against the backdrop of continuing probes by the Enforcement Directorate (ED), which is probing alleged money laundering, and SEBI, which has already issued an interim order on suspected diversion of funds.
The Securities and Exchange Board of India recently took action against Gensol Engineering and its top promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, on suspected financial mismanagement. This includes alleged diversion of funds and misdeeds regarding the group's electric mobility ventures, namely its linkage with BluSmart, a EV ride-hailing firm.
As per on-going investigations, the ED has joined the list of investigating agencies, with its sights set on the alleged money laundering and diversion of term loans purchased by the group. The agency will be meeting key stakeholders in the coming weeks to gather further evidence.
Between 2021 and 2024, Gensol raised term loans of ₹978 crore from institutions like IREDA and PFC, mainly to finance the purchase of 6,400 electric vehicles for leasing to BluSmart. ₹664 crore of this was earmarked only for vehicle purchase, while the company also made a 20% equity contribution—taking the total estimated investment in the EVs to around ₹830 crore.
Although, in a February 2025 share exchange listing, the company itself stated that only 4,704 EVs were purchased and not the whole 6,400. That's also what its vendor Go-Auto said, reporting they were purchased in total for a total of ₹568 crore. SEBI noted the remaining discrepancy of ₹262.13 crore—between the proposed deployment and expenses incurred—is gone unaccounted for despite the last tranche of funds being more than one year ago.
There was additional alarm sounded when SEBI sounded an alarm regarding inconsistencies in Gensol's January 2025 claim that it had pre-booked 30,000 electric vehicles at the Bharat Mobility Global Expo 2025. The regulator found that the 29,000 EVs said to have been ordered under nine non-binding MoUs contained no significant commercial details such as the prices and delivery terms.
The ED's probe dug deeper after it associated Gensol Engineering shares held by a shareholder allegedly linked to the Mahadev online gambling app case, further clouding the company's financial picture.
The probes of Gensol Electric, Gensol Engineering, and BluSmart have fueled more broad conversations of governance norms and disclosure of finances among Indian startups, especially those that are operating in high-growth segments like electric mobility.
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