Corporate Mismanagement
NCLT orders freezing of bank accounts of Gensol Engg, arms on Centre's plea
This story was originally published at 07:23 IST on 29 May 2025
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NEW DELHI – The Ahmedabad bench of the National Company Law Tribunal has ordered freezing of the bank accounts of Gensol Engineering Ltd., its 10 subsidiaries, and several individuals on a plea by the central government alleging oppression and mismanagement in the companies' affairs. Issuing notice to Gensol Engineering and others, the tribunal placed the matter for hearing on Jun. 3.
"...this tribunal notes serious allegations of fraudulent conduct, including diversion of company funds by the promoters of Gensol Engineering Ltd. (Respondent No. 1) and related entities, violation of corporate governance norms, manipulation of financial statements, default in loan repayments despite false declarations, and illegal alienation of company assets," the tribunal said. Investigation reports and regulatory findings by the Ministry of Corporate Affairs, the Securities and Exchange Board of India, and the Serious Fraud Investigation Office prima facie support the Centre's claims of systemic fraud involving substantial public interest, it said.
The Centre had filed the petition alleging that the affairs of Gensol Engineering and its arms were being conducted in a manner prejudicial to their interests or the company's interests. The respondent companies were found to be in blatant violation of corporate governance norms, including diversion of funds by promoter entities, and rerouting of borrowings raised for specific purposes in a fraudulent and illegal manner, which amounts to gross violations of the Companies Act, 2013, the Centre said. Investigations under the Companies Act, 2013 are currently underway by inspectors appointed by the Ministry of Corporate Affairs, it said.
The pattern of illegal fund diversion, asset misstatement, and share price manipulation had caused irreparable harm to public shareholders, creditors, and other stakeholders, the Centre added.
Last month, the Securities and Exchange Board of India said it was probing Gensol Engineering and its promoters for diverting loans taken from Power Finance Corp. Ltd. and Indian Renewable Energy Development Agency Ltd. The regulator also issued an interim order against the company and its promoter directors Anmol and Puneet Jaggi, barring them from any securities market-related activity and from holding the post of director or any key managerial position in the company till further orders.
On Wednesday, shares of Gensol Engineering Ltd. ended 2.0% lower at INR 62.98 on the National Stock Exchange. End
Reported by Surya Tripathi
Edited by Avishek Dutta
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