Gensol Engineering Ltd has approached the Securities Appellate Tribunal (SAT) to challenge the April 15 interim order issued by the Securities and Exchange Board of India (SEBI), which barred the company’s promoters from accessing the securities market.
SEBI’s Allegations Against Gensol Engineering
- SEBI accused Gensol of misutilizing loans worth ₹977.75 crore, secured from IREDA and PFC, meant for electric vehicle (EV) procurement.
- The regulator alleged that ₹262.13 crore remains unaccounted, with funds diverted for personal expenses, including luxury purchases and real estate investments.
- SEBI also claimed that Gensol submitted falsified documents to credit rating agencies and lenders.
SAT Hearing & Gensol’s Defense
- Gensol argued that SEBI’s order hindered its ability to sell subsidiaries and repay financial institutions.
- The company also sought a stay on the forensic audit ordered by SEBI, citing misinterpretation of financial transactions.
- SEBI opposed the relief, stating that IREDA and PFC confirmed document falsification and fund diversion.
SAT’s Decision
- SAT denied interim relief to Gensol, directing SEBI to pass a final order within four weeks.
- The tribunal instructed Gensol to file its response within two weeks, after which SEBI will issue a confirmatory order.
Regulatory & Legal Implications
- The Ministry of Corporate Affairs (MCA) has also launched an investigation into Gensol and its related entities.
- The Enforcement Directorate (ED) is probing foreign exchange violations under FEMA.
With SEBI tightening its scrutiny, Gensol Engineering faces intensified regulatory challenges, as the company seeks to defend its financial practices before SAT.
