IREDA Files Insolvency Plea Against Gensol Engineering

MUMBAI: In a significant move, the Indian Renewable Energy Development Agency (IREDA) has filed an insolvency plea against Gensol Engineering, citing a default of Rs 510 crore. This action, under section 7 of the Insolvency and Bankruptcy Code, marks a pivotal moment in the ongoing financial saga surrounding Gensol.

The Scandal Unfolds

The troubles for Gensol began when a Sebi probe in April revealed that the company's promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, misused loans for personal gains, including the purchase of a luxury flat and inflating Gensol’s stock price. The discovery of forged no-default letters from lenders like IREDA and PFC further tarnished the company's reputation.

Legal and Financial Repercussions

Following the scandal, IREDA lodged a complaint with the Economic Offences Wing against Gensol, clarifying that it did not issue the falsified documents referenced by credit rating agencies. The Jaggi brothers have since stepped down from their positions on Gensol’s board, complying with Sebi’s directives. The stock of Gensol has plummeted by nearly 54% on the BSE, frequently hitting the daily lower circuit.

The Bigger Picture

IREDA and Power Finance Corp had lent approximately Rs 977 crore to Gensol between FY22 and FY24, with Rs 663 crore intended for electric vehicles to be leased to BluSmart, a ride-hailing firm promoted by the Jaggi brothers. BluSmart's suspension of operations last month adds another layer to this complex financial web.