The Securities and Exchange Board of India (SEBI) has issued an interim order against Gensol Engineering Ltd. (GEL) and its promoters, Anmol Singh Jaggi and Puneet Singh Jaggi. The order bars the promoters from accessing the equity markets and taking up any directorial or key managerial roles in the company.
SEBI’s investigation revealed that the Jaggi brothers diverted company funds for personal use. This included routing ₹42.94 crore from a larger loan secured by Gensol to purchase a luxury apartment through Capbridge Ventures, a firm controlled by Anmol Singh Jaggi. The order also noted that Jaggi used ₹50 lakh from the funds to invest in a startup called Third Unicorn.
Additionally, ₹6.20 crore was diverted to Anmol Singh Jaggi’s mother, while his wife received ₹2.98 crore.
Sebi investigation findings
He allegedly spent ₹26 lakh on a golf set and on personal travel.
SEBI Whole Time Member Ashwani Bhatia stated in the order, “The prima facie findings have shown misutilization and diversion of funds of the company (GEL) in a fraudulent manner by its promoter directors, Anmol Singh Jaggi and Puneet Singh Jaggi, who are also the direct beneficiaries of the diverted funds.”
The regulator also directed GEL to put a stock split on hold, as the promoter holding in the company has already come down substantially. SEBI suspects that the recently announced 1:10 stock split would likely attract more retail investors to the scrip. Shares of Gensol Engineering crashed to their five percent lower circuit on April 16 following the SEBI order.
Over the past month, the company’s shares have fallen 46 percent and have plummeted 86 percent over the past 12 months. The interim order highlighted a breakdown of internal controls and corporate governance norms in Gensol. SEBI’s measures signal ongoing scrutiny and possible further action to ensure adherence to corporate governance standards and protection of investors’ interests.
