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Gensol Engineering: SAT Dismisses Appeal, Asks SEBI To Pass Final Order in 4 Weeks
Moneylife Digital Team 07 May 2025
Investor Interest
While disposing an appeal filed by Ahmedabad-based Gensol Engineering Ltd seeking a stay on an interim order passed by the Securities and Exchange Board of India (SEBI), the securities appellate tribunal (SAT) directed the market regulator to pass a final order within four weeks in this matter. SEBI, in its 15 April 2025 order, unmasked what it describes as a brazen scheme by Anmol Singh Jaggi and Puneet Singh Jaggi (the Jaggi brothers), the promoters of Gensol, to siphon hundreds of crores of rupees from the publicly-listed company into their own private ventures, including electric mobility start-up BluSmart.
 
Challenging the interim order, Gensol and the Jaggi brothers filed an appeal before the SAT. It contended that the SEBI order is 'illegal, unjustified, and unwarranted', and fails to meet the statutory threshold for issuing such interim directions without a hearing. 
 
Gensol also argued that the SEBI order does not establish any pressing urgency, pointing out that the investigation stemmed from a complaint received nearly 10 months earlier in June 2024. It accused SEBI of misusing its powers under Sections 11 and 11B of the SEBI Act.
 
The appeal specifically challenged the market regulator’s conclusion that Rs50 crore was siphoned off through Go-Auto Pvt Ltd and Capbridge Ventures LLP for personal use, arguing that the latter had repaid a substantial amount well before the SEBI order.
 
During the hearing, senior counsel Chetan Kapadia, representing SEBI, vehemently objected to a stay on the 15th April order sought by Gensol. While arguing that the alleged forgery of the no-objection certificates (NOCs) submitted by Gensol is 'just the tip of the iceberg', he insisted that the company’s transactions need to be examined in depth.
 
Gensol raised over Rs977 crore in loans from State-owned lenders like the Indian Renewable Energy Development Agency (IREDA) and Power Finance Corporation (PFC) to expand its EV fleet and execute engineering-procurement-construction (EPC) contracts. SEBI's analysis showed that large portions of these loans were never used for their intended purposes.
 
Instead, the funds were systematically split, shuffled between internal accounts and funnelled into promoter-controlled companies. In one case, Rs96.69 crore from a PFC loan ended up with entities like Capbridge and Gensol Consultants — again, directly tied to the Jaggis.
 
Worse, SEBI found instances of circular transactions — where Rs10 crore was passed in a loop through four companies in a single day — solely to create an illusion of genuine business activity.
 
To keep the scheme afloat, Gensol submitted forged no-default certificates to credit rating agencies (CRAs) and tried to withdraw ratings based on fake no-objection certificates (NOCs). SEBI confirmed that lenders like the Indian Renewable Energy Development Agency Ltd (IREDA) and Power Finance Corporation Ltd (PFC) never issued these documents.
 
Later PFC also filed a formal complaint with the economic offences wing (EOW) of the Delhi police against Gensol, accusing the electric mobility firm of submitting falsified documents to obtain loans and misusing funds allocated for the purchase of electric vehicles (EVs). (Read: PFC Files Fraud Complaint against Gensol Engineering over Misuse of EV Loan Funds)
 
On Wednesday, while refusing to pass any order in favour of the company, the SAT bench of justice PS Dinesh Kumar (presiding officer) and Meera Swarup (technical member) disposed the appeal with a direction to SEBI to pass the confirmatory order within four weeks of hearing it.
 
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