The promoters of Gensol Engineering, Anmol Singh Jaggi and Puneet Singh Jaggi, have resigned from the company following an interim order issued by the Securities and Exchange Board of India (Sebi). In an exchange filing dated May 12, the company announced that Anmol Singh Jaggi, who served as managing director, and Puneet Singh Jaggi, whole-time director, stepped down with effect from the close of business hours on the same day. Their resignations come nearly a month after Sebi barred both individuals from holding key managerial positions at Gensol.

Shares of Gensol Engineering continued to reel under pressure, having already plunged 95% from their 52-week high and over 79% since March. The stock opened 5% lower at ₹51.25 from its previous close of ₹53.95 on the NSE on Tuesday.

In his resignation mail, Anmol Singh Jaggi attributed his departure directly to the Sebi order issued on April 15, 2025. Alongside stepping down from executive roles, the Jaggi brothers will cease to be members of any committees within the company.

"I am hereby resigning from the post of Managing Director of Gensol Engineering Limited with effect from the close of business hours on May 12, 2025. Further, I declare that I am resigning due to the direction given under SEBI Interim Order dated April 15, 2025…Further, I hereby confirm that there is no other material reason other than stated aforesaid," Anmol Jaggi said in his resignation mail.

The resignations follow Sebi’s stringent actions in response to serious governance failures at Gensol. The market regulator had barred the Jaggi brothers from accessing the securities market and from holding any directorship or key managerial role in the company until further notice. Gensol’s appeal to the Securities Appellate Tribunal (SAT) failed to secure a stay on Sebi’s April 15 order. However, SAT directed the company to respond to Sebi’s show-cause notice within two weeks, with a confirmatory order expected in four weeks.

Sebi’s 29-page interim order outlined serious findings, including fund diversion and submission of forged documents. The probe was initiated following a complaint in June 2024 alleging share price manipulation and misappropriation of funds. According to Sebi, the promoters misused company funds for personal gain and treated the listed company as a private enterprise.

The order detailed how Gensol misled not only the regulator but also credit rating agencies, lenders, and investors by submitting falsified conduct letters supposedly issued by its lenders. Sebi found that company funds were routed to related entities and used for unrelated personal and business expenses, effectively turning Gensol’s accounts into a vehicle for private enrichment.

The order stated that funds meant for EV procurement were often rerouted back to Gensol or to entities associated with the Jaggi brothers. These diverted amounts were used for personal expenditures such as purchasing a luxury apartment, making transfers to close relatives, and investing in privately held businesses of the promoters.

A forensic audit has been mandated to examine Gensol’s books and those of its related parties. The financial irregularities span significant transactions, particularly around electric vehicle (EV) purchases. Between FY22 and FY24, Gensol secured loans amounting to ₹977.75 crore from Ireda and PFC, of which ₹663.89 crore was earmarked for acquiring 6,400 EVs. However, the company has acknowledged acquiring only 4,704 EVs worth ₹567.73 crore, leaving a discrepancy of ₹262.13 crore after accounting for its required equity contribution.

In parallel, the Ministry of Corporate Affairs has initiated a separate probe into the affairs of Gensol Engineering and BluSmart Mobility for alleged violations of the Companies Act. The Institute of Chartered Accountants of India is also reviewing the financial statements of both companies for FY24 through its Financial Reporting Review Board, with findings expected in six months.