The unravelling of the can of worms at Gensol Engineering has taken a fresh turn after Power Finance Corporation (PFC)—a state-run Non-Banking Finance Corporation (NBFC)—lodged a complaint against Gensol in the Economic Offences Wing of the Delhi Police late last night, alleging Gensol wilfully falsified documents.

“PFC has filed a complaint with the Economic Offences Wing (EoW) concerning the issuance of falsified documents. PFC is committed to safeguarding its interests and ensuring the recovery of its loan while upholding transparency in its operations,” read PFC’s statement.

PFC alleged that Gensol falsified letters to it, along with the Indian Renewable Energy Development Agency (IREDA), its two lenders, claiming that it was regular at debt servicing. However, the purported fraud was unearthed when the credit agencies began verifying the letters with the lenders.

In conjunction with the lodged complaint, PFC also clarified in its statement that it did not issue any letters to CARE and ICRA, the two credit rating agencies that brought the matter to light. It is also investigating the matter internally as part of its ‘anti-fraud’ policy.

The state-run NBFC said it had sanctioned ₹633 crore to Gensol under the FAME and PM E-Bus Seva schemes to promote electric mobility. Of this, ₹587 crore was allocated for the procurement of 5,000 electric four-wheelers to be leased to BluSmart Mobility, and ₹46 crore was set aside for 1,000 electric three-wheelers for cargo use. However, the three-wheeler loan was never availed.

So far, ₹352 crore of the ₹587 crore earmarked for BluSmart’s fleet has been disbursed. A total of 2,741 vehicles have been delivered and hypothecated to PFC, as verified by third-party agencies appointed by the NBFC. PFC added that it is actively exploring all legal and financial avenues to recover the remaining ₹307 crore from Gensol.

The unravelling of Gensol Engineering, a clean energy company that was once the darling of investors, started with the action initiated by the market regulator Securities and Exchange Board of India (Sebi). Sebi, following an investigation, barred promoter brothers Anmol Singh Jaggi and Puneet Singh Jaggi from holding any directorial or key managerial roles in the company. The regulator had also put a stop to the company’s planned stock split and appointed a forensic auditor to deepen its probe.

The crackdown follows a complaint received in June 2024, prompting Sebi to launch an investigation into alleged governance failures, fund diversion, and the submission of falsified documents.