PFC, IREDA Consider Legal Action Against Gensol Over ₹977 Crore Loan Exposure
New Delhi/Mumbai, April 17: In the wake of serious allegations involving fund misappropriation and forged financial documents, state-run lenders Power Finance Corporation (PFC) and Indian Renewable Energy Development Agency (IREDA) are reportedly exploring legal avenues to protect their collective loan exposure of ₹977 crore to Gensol Engineering.
According to sources familiar with the development, the move comes after the Securities and Exchange Board of India (SEBI) imposed a capital market ban on Gensol’s promoters, Anmol Singh Jaggi and Puneet Singh Jaggi. The regulator’s preliminary probe has revealed multiple regulatory violations, including the submission of fabricated documents to credit rating agencies to represent timely loan repayments to lenders falsely.
Ties to BluSmart and EV Leasing
The Jaggi brothers are also founders of BluSmart, an electric ride-hailing platform backed by major investors, including BP Ventures. As per SEBI’s findings, Gensol received loans totaling ₹977 crore from PFC and IREDA between FY2021-22 and FY2023-24. Of this, ₹663 crore was allocated specifically for procuring electric vehicles (EVs), which were to be leased to BluSmart. Currently, approximately 5,500 EVs have been leased out under this arrangement.
BluSmart’s operations reportedly came to a halt on Thursday, adding to concerns about the future of the EV venture amidst the growing legal and financial turmoil.
Forgery and Fund Diversion Allegations
SEBI’s investigation uncovered that Gensol provided counterfeit letters to rating agencies, indicating that its loan accounts with PFC and IREDA were in good standing, with timely repayments being made. These documents, however, were allegedly forged in an effort to maintain favorable credit ratings and mask irregularities.
The capital markets regulator formally disclosed these findings on April 15 and has barred the Jaggi brothers from occupying management roles in any listed companies. The revelations have raised alarm bells across the financial and renewable energy sectors, as public funds are at risk.
Next Steps for Lenders
Both PFC and IREDA are now reviewing legal options to secure their financial interests and prevent further loss. The lenders are expected to initiate recovery proceedings and may potentially seek recourse through court intervention or debt restructuring measures.
The unfolding case highlights the growing scrutiny of corporate governance practices in India’s renewable energy and EV sectors, especially as public institutions channel large investments into green infrastructure.
For more news, subscribe to questiqa.biz
Author
About The Author
