SEBI Orders Forensic Audit of Gensol Engineering’s Financial Records

The Securities and Exchange Board of India (SEBI) has initiated a forensic audit of Gensol Engineering Ltd.’s financial statements. Raju and Prasad Chartered Accountants have been appointed to carry out the audit.

As of 9:24 AM on May 9, 2025, Gensol Engineering share price was trading at ₹56.79, a 5% decrease, with a 59.33% decline over the past month and an 18.57% drop in the last five days.

Focus Period: FY2022 to FY2025

Gensol informed the stock exchanges on May 8 that the audit will cover financial years 2021-22 through 2024-25. The company stated that the scope of the audit was provided in a SEBI letter dated May 7, 2025. However, the actual letter was not made available as part of the disclosure.

Background: SEBI’s Interim Order

This action follows SEBI’s interim order issued on April 15, 2025, concerning alleged fund misuse by the company’s promoters. The order highlighted that the Jaggi brothers linked to Gensol were involved in routing company funds for personal use through round-tripping transactions.

SEBI had directed that a forensic auditor be appointed to review the matter. The auditor is required to submit the report within six months of appointment.

Read more: Retail Rush Turns Risky: Over 1 Lakh Investors Trapped in Gensol Engineering Shares!

Company’s Statement on the Audit

In its filing, Gensol said it would provide necessary cooperation to the appointed auditors. The company also noted that it received a formal letter from SEBI detailing the audit scope, but the specifics were not disclosed publicly.

While the company mentioned SEBI’s communication dated May 7, the disclosure did not include the actual document. This leaves the precise audit scope and instructions unclear from a public perspective.

Conclusion

The forensic audit will examine three years of Gensol’s financial activities, triggered by SEBI’s concerns regarding promoter-related fund movement. The audit firm is expected to submit findings within six months. No further comment has been issued by SEBI or the auditors at this time.

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