Gensol Engineering is facing deepening turmoil as its Chief Financial Officer (CFO), Jabirmahendi Mohammedraza Aga, has resigned, citing immense pressure and regulatory challenges. His departure comes just days after the company’s promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, stepped down following Securities and Exchange Board of India (SEBI) investigations.
Regulatory Scrutiny and Leadership Exodus
Gensol Engineering is currently under multiple regulatory investigations, including probes by SEBI, the Ministry of Corporate Affairs, and the Enforcement Directorate (ED). The company has been accused of fund diversion and governance lapses, leading to SEBI barring the Jaggi brothers from holding key managerial positions.
In his resignation letter, Aga expressed concerns over the disorganization of critical data, which has hindered the company’s ability to respond effectively to ongoing inquiries. He stated that the pressure from regulatory scrutiny had adversely affected his physical and mental well-being, prompting his decision to step down.
Financial and Legal Challenges
The crisis has escalated further with the Indian Renewable Energy Development Agency (IREDA) filing an insolvency plea against Gensol Engineering, which was accepted by the National Company Law Tribunal (NCLT) last week. The company is also facing allegations of misusing funds meant for electric vehicle purchases, with reports indicating that diverted funds were used for personal expenses, including real estate acquisitions.
Impact on BluSmart and Market Sentiment
The financial troubles of Gensol Engineering have also affected BluSmart, an electric ride-hailing company co-founded by the Jaggi brothers. BluSmart suspended operations in April due to a cash crunch and failed fundraising attempts.
Following SEBI’s findings, three independent directors have resigned from Gensol Engineering’s board, further deepening the leadership crisis. Meanwhile, Gensol’s share price hit the 5% upper circuit on the Bombay Stock Exchange (BSE), reflecting market volatility amid ongoing investigations.
What’s Next for Gensol Engineering?
With regulatory probes intensifying and leadership instability, Gensol Engineering faces an uncertain future. The company’s ability to navigate legal challenges, restore investor confidence, and restructure its operations will be crucial in determining its long-term viability.
