Gensol Promoters Accused of Fund Misuse
In a recent interim order, the Securities and Exchange Board of India (SEBI) revealed alarming details about how the promoters of Jensol Engineering treated the listed company as their personal piggy bank. The funds were allegedly diverted to finance high-end expenses such as purchasing a luxury apartment in DLF’s Camellias (Gurugram), splurging on a luxury golf set, settling credit card bills, and transferring money to close relatives.
A Pattern of Fund Diversion
At the heart of SEBI’s findings is a troubling pattern of fund diversion by promoters Anmol Singh Jaggi and Puneet Singh Jaggi. This highlights severe governance failures within the company. The controversy revolves around the alleged misuse of term loans taken by Jensol Engineering Limited (JEL) from IREDA and PFC.
According to SEBI, the company secured a total loan of ₹977.75 crore, of which ₹663.89 crore was specifically earmarked for purchasing 6,400 electric vehicles (EVs). These EVs were meant to be leased to Bluesmart, a related party. However, in a February submission to SEBI, Jensol admitted to purchasing only 4,704 EVs far fewer than the number for which funding was received. Go-Auto Private Limited, the EV supplier, confirmed delivering these units at a total cost of ₹567.73 crore.
The Missing Funds
Jensol was also required to contribute an additional 20% equity, making the total expected expenditure for EVs approximately ₹829.86 crore. By this calculation, a staggering ₹262.13 crore remains unaccounted for.
SEBI analyzed bank statements of both Jensol and Go-Auto to trace the funds. The regulator discovered that money transferred to Go-Auto for EV purchases was often rerouted to entities directly or indirectly linked to Anmol and Puneet. Shockingly, some of these funds were used for purposes entirely unrelated to the approved loans.
Luxury Spending & Personal Gains
- ₹42.94 crore routed through Anmol’s Capbridge Ventures to finance a luxury apartment in DLF Camellias.
- ₹50 lakh invested in Ashneer Grover’s startup Third Unicorn, along with personal travel and leisure expenses.
- ₹6.20 crore transferred to Anmol’s mother, Jasmindar Kaur, and ₹2.98 crore to his wife, Mugdha Kaur Jaggi.
- Extravagant personal expenses, including ₹26 lakh on golf equipment and ₹3 lakh via MakeMyTrip for travel.
Puneet’s bank statements revealed transfers of ₹1.13 crore to his wife Shalmalii Kaur Jaggi, ₹87.52 lakh to his mother, and funds used to pay credit card bills. SEBI concluded that the promoters treated the company’s funds as their own, prioritizing personal gain over shareholder interests.
SEBI’s Stern Actions
In a 29-page order, SEBI stated: “Company funds were funneled to related parties and used for unrelated expenses, as if the promoters’ personal coffers. These transactions must eventually be written off from the company’s books, harming investors.”
The regulator imposed major restrictions, including:
- Barring the Jaggi brothers from holding directorial or key management roles in Jensol or any listed company.
- Restricting Jensol and its promoters from accessing securities markets until further notice.
- Halting Jensol’s proposed 1:10 stock split, which could have misled retail investors.
About Jensol Engineering
Listed on BSE and NSE, Jensol Engineering operates in solar consulting, engineering, procurement, construction (EPC), and EV leasing. The case underscores critical governance lapses and the urgent need for accountability in corporate fund management.
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