Gensol's troubles will increase due to misuse of loan, government can also investigate

The problems of Gensol Engineering Company, which is entangled in the charges of diversion of funds, are escalating further. To be sure, based on media reports, the Ministry of Corporate Affairs can initiate suo motu cognizance and make an inquiry regarding Gensol Engineering. As a matter of fact, Gensol has been accused of financial irregularities and breach of regulations. Gensol has been accused of misusing a loan of Rs 975 crore, it is alleged.

The government has reportedly initiated a probe into the regulatory filings, financial statements of Gensol, too. Besides this, the government would also probe if the company has been negligent with regard to the norms of corporate governance. SEBI has already disqualified Gensol Engineering promoters Jaggi brothers from the capital market. Besides this, Jaggi brothers have been disqualified from serving crucial positions at the company, too. SEBI has charged Gensol with misappropriation of funds and manipulation of documents, too. SEBI has ordered the forensic audit, too.

Gensol Engineering had taken a loan of Rs 975 crore from government lending institutions IREDA and Power Finance Corporation. This loan was taken to buy electric cars for the cab service company Bluesmart. Out of this loan, more than Rs 200 crore was used by Gensol's promoters, Jaggi brothers, for personal benefit. With this money, Jaggi brothers bought luxury flats and spent on other personal items.