SEBI Cracks Down on Gensol Engineering: Fake EV Orders and Fund Diversion Uncovered
Mumbai, April 21, 2025 – In a damning interim order issued on April 15, the Securities and Exchange Board of India (SEBI) has revealed significant irregularities and financial misconduct by Gensol Engineering and its promoters, Anmol Singh Jaggi and Puneet Singh Jaggi. The investigation follows a complaint received in June 2024 regarding suspected share price manipulation and fund misappropriation.
SEBI’s findings paint a concerning picture of fraudulent corporate behavior, including misleading investor disclosures, a non-functional EV manufacturing unit, and the diversion of company funds for personal gain.
EV Plant in Pune Found Inactive
One of the most startling revelations from SEBI’s investigation is the alleged non-operational status of Gensol’s electric vehicle plant, Gensol Electric Vehicle Private Ltd, located at Chakan in Pune.
According to SEBI, a National Stock Exchange (NSE) official visited the facility on April 9, 2025, only to discover that no manufacturing was underway, with just 2–3 labourers present at the site. The inspection also found that the electricity consumption was minimal — the maximum bill over the past year was only ₹1,57,037 (December 2024), further suggesting no production activity at the unit.
“It can be inferred that there has been no manufacturing activity at the plant site which is on a leased property,” SEBI stated in its order.
Misleading EV Pre-Order Claims
On January 28, 2025, Gensol announced it had received pre-orders for 30,000 electric vehicles displayed at the Bharat Mobility Global Expo 2025. However, SEBI’s scrutiny revealed that these were non-binding MoUs with nine entities, collectively accounting for 29,000 vehicles.
These agreements lacked key details, such as pricing, payment terms, and delivery timelines, leading SEBI to conclude that Gensol had misled investors by projecting expressions of interest as confirmed orders.
Strategic Partnerships and Valuations Under Scrutiny
SEBI also raised red flags over Gensol’s other public disclosures:
- On January 16, Gensol claimed a strategic tie-up with Refex Green Mobility Ltd for the transfer of 2,997 electric vehicles and the takeover of a ₹315 crore loan. This agreement was later withdrawn on March 28, further muddying the waters.
- On February 25, Gensol announced a non-binding term sheet for a ₹350 crore transaction involving its US subsidiary, Scorpius Trackers Inc., incorporated only six months prior. The company failed to justify the inflated valuation during SEBI’s inquiry.
Financial Diversion and Personal Enrichment
The investigation revealed the misappropriation of funds meant for electric vehicle procurement. Gensol secured loans totaling ₹977.75 crore from IREDA and PFC between FY22 and FY24, with ₹663.89 crore earmarked for the acquisition of 6,400 EVs.
However, only 4,704 vehicles were reportedly purchased, totaling ₹567.73 crore, leaving an unaccounted amount of ₹262.13 crore.
According to SEBI, these funds were diverted back to Gensol or entities linked to the Jaggi brothers, and some of the money was allegedly used for personal luxuries, including:
- Purchase of a high-end apartment
- Transfers to close relatives
- Investments in private entities owned by the promoters
SEBI’s Disciplinary Actions
In response to the findings, SEBI has issued strict measures:
- Prohibited Gensol Engineering and its promoters from accessing the securities market until further notice.
- Barred Anmol Singh Jaggi and Puneet Singh Jaggi from holding any directorship or key managerial roles in the company.
- Ordered Gensol to put its proposed 1:10 stock split on hold.
Following the regulatory order, the Jaggi brothers resigned from their roles as directors.
The Gensol Engineering SEBI investigation is a stark reminder of the importance of corporate transparency and regulatory oversight in India’s growing clean-tech and electric vehicle sectors. As the case unfolds, it is likely to spark broader conversations about corporate governance, investor protection, and the credibility of emerging EV players in the Indian market.