SEBI Cracks Down on Gensol Engineering Over Funds Misuse: Halts Stock Split

On April 15, 2025, the capital market regulator, the Securities and Exchange Board of India (SEBI) has taken serious action on GensolEngineering.

SEBI Order Against Gensol Engineering

Following allegations of fund misappropriation and misleading disclosures, the market regulator on Tuesday issued an interim order against Gensol Engineering and its promoters, Anmol Singh Jaggi and Puneet Singh Jaggi.

The order by SEBI restrained the promoters from holding any directorial or key managerial positions in the company and barred them from taking part in the securities market, which means they are not allowed to buy, sell, or deal in securities.

SEBI will appoint a forensic auditor to review Gensol’s financial records, with the audit report expected within six months.

SEBI’s Investigation

The SEBI investigation revealed that Gensol Engineering had taken ₹977.75 crore in term loans, with ₹663.89 crore designated for acquiring 6,400 electric vehicles (EVs). However, only 4,704 EVs worth ₹567.73 crore were purchased, leaving ₹262.13 crore unaccounted for.

Allegedly, a portion of the funds was diverted to the promoters or their related parties and used for luxury spending, real estate acquisitions, and transfers to family members. The investigation also found suspected round-tripping of funds between Gensol and Go-Auto, the EV supplier.

Moreover, Gensol’s claim of receiving orders for 30,000 EVs was found to be based on a non-binding memorandum of understanding, lacking critical details such as pricing and delivery timelines. A site inspection further revealed no manufacturing activity at the company’s plant, raising additional concerns.

Also Read: SEBI’s Probe into Gensol Engineering

SEBI Halts Gensol Stock Split

Following these developments, SEBI has suspended Gensol’s proposed 1:10 stock split, stating that the move is not in the best interest of investors.

Conclusion

SEBI’s Interim order marks a significant regulatory intervention, reflecting the seriousness of the allegations against Gensol Engineering and its promoters. With questions surrounding the diversion of funds and misleading disclosures.

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