In a 33-page order, the regulator noted that the company and Jaggi brothers failed to effectively rebut the findings of the April 15 interim order regarding falsification of Conduct Letters and diversion/ mis-utilisation of funds by the listed solar EPC and EV leasing firm.
“I find that the chaprima facie findings regarding diversion / mis-utilization of funds of Gensol have not been successfully rebutted by Noticees. I also note that a detailed investigation in this matter is being carried out. Further, a forensic auditor has already been appointed to examine the books of accounts of Gensol and its related parties. The concrete findings of the investigation and the forensic auditor are yet to emerge. As has been submitted by Noticees themselves, the findings of the forensic audit will serve to corroborate the factual position and provide greater clarity on the matters under scrutiny,” the order said.
Sebi rejected the arguments put forward by the brothers who challenged the order saying that it was not warranted.
The investigation began in June 2024 following a complaint alleging price manipulation and fund misuse. Sebi’s probe revealed that Gensol submitted fake Conduct Letters to credit rating agencies ICRA and CARE Ratings, purportedly issued by lenders IREDA and PFC, to conceal debt servicing defaults. These letters were later disowned by the lenders.
A major concern highlighted by Sebi was the diversion of funds from term loans amounting to Rs 977.75 crore, mostly meant for the purchase of 6,400 electric vehicles (EVs). Gensol claimed it procured 4,704 EVs, costing Rs 567.73 crore, yet transferred Rs 775 crore to Go-Auto—the alleged supplier—leaving over Rs 207 crore unaccounted.The trail of funds, according to Sebi, showed that money sent to Go-Auto was routed back to Gensol and then allegedly diverted to entities controlled by the Jaggi family. Notably, part of the funds was used to purchase luxury real estate, including an apartment in DLF’s premium Camellias project, and for personal expenses such as foreign currency purchases and luxury goods.Additionally, Sebi noted that Gensol misled the public by announcing pre-orders for 30,000 EVs that were in fact non-binding MoUs, and its Pune-based EV manufacturing facility showed no active production during inspections.
The regulator has confirmed restrictions placed on the company and its promoters from accessing the securities market. It has also directed a forensic audit of Gensol and related entities.
Sebi’s findings suggest serious breaches of the SEBI Act, 1992, PFUTP Regulations, and LODR norms, including misuse of shareholder funds and inadequate disclosures on related party transactions. The matter remains under further investigation.
