New Delhi, May 12 — The promoters of Gensol Engineering Ltd, Anmol Singh Jaggi and Puneet Singh Jaggi, have officially resigned from their respective leadership roles following the Securities and Exchange Board of India’s (SEBI) interim order citing serious governance failures and financial misconduct.
Resignation Following SEBI Ban
In a regulatory filing to the stock exchanges, Gensol Engineering confirmed that Anmol Singh Jaggi, who held the position of Managing Director, and Puneet Singh Jaggi, a Whole-time Director, have stepped down from their roles. The resignations take effect from the close of business hours on May 12, 2025. They will also cease to be part of any board committees of the company.The resignations follow SEBI’s April 15, 2025, interim order, which barred both promoters from accessing the securities market and from holding any directorial or key managerial positions in the company. The order also mandated Gensol Engineering to halt its proposed stock split.
Allegations of Fraud and Corporate Misgovernance
SEBI’s investigation began after a complaint in June 2024 alleged manipulation of Gensol’s share price and diversion of company funds. The regulator’s 29-page interim order revealed prima facie evidence that the Jaggi brothers fraudulently misused and diverted company funds for personal benefit.According to SEBI, Gensol Engineering had submitted forged conduct letters, falsely claiming they were issued by lenders, to mislead regulators, credit rating agencies, lenders, and investors.
SEBI further noted that Anmol and Puneet Singh Jaggi managed the publicly listed company in a manner akin to a proprietorship, treating corporate funds as their own. Funds were routed to related parties and used for unrelated expenses, expecting such transactions to be written off, eventually causing direct losses to investors.
SEBI's Scathing Remarks on Corporate Governance
In the order, SEBI whole-time member Ashwani Bhatia remarked, “The diversion of funds of the company (GEL) by promoter entities reflects a culture of weak internal control, where even ring-fenced borrowings from institutional creditors were rerouted at the total discretion of the promoters.”He highlighted the ease with which Gensol's internal systems allowed the movement of funds through layered transactions to multiple related parties and individuals. Bhatia emphasized the systemic failure in governance, stating that “blatant violations of corporate governance rules” were evident in the company’s operations.
Forensic Audit Ordered
In response to these findings, SEBI has directed Gensol Engineering to appoint a forensic auditor to thoroughly investigate its financial records, including those of its related entities.The developments mark a significant blow to the company, which is now under intensified regulatory scrutiny as it seeks to restore investor confidence and rebuild its governance framework.