SEBI finds no manufacturing at Gensol's EV plant, only 2-3 labourers

Markets regulator SEBI (Securities and Exchange Board of India) has said it found "no manufacturing activity" at Gensol Engineering's electric vehicle (EV) plant in Pune, with only two-three labourers present when a National Stock Exchange (NSE) official visited the site.

These revelations were part of the markets regulator's interim order issued on 15 April following a complaint received in June 2024 alleging manipulation of Gensol's share price and misappropriation of funds. In its order, SEBI found discrepancies as well as misleading disclosures to investors by Gensol Engineering, a company promoted by brothers Anmol Singh Jaggi and Puneet Singh Jaggi.

One of the disclosures came from an investigation conducted by the NSE, which revealed a lack of manufacturing activity at Gensol's EV plant — Gensol Electric Vehicle Private Ltd — at Chakan in Pune. On a site visit to the facility on 9 April, an NSE official found only two-three labourers present.

"It was found that there was no manufacturing activity at the plant with only 2-3 labourers present there. The NSE official called for details of electricity bills of the unit and it was observed that the maximum amount billed by Mahavitaran during the last 12 months was Rs 1,57,037.01 for December 2024.

"Hence, it can be inferred that there has been no manufacturing activity at the plant site which is on a leased property," SEBI revealed in its interim order passed on 15 April.

Every Blusmart car bought by Gensol was entirely with public money. We are the owners of this car.

IREDA and PFC (both Govt of India agencies) gave 664 Cr for buying 6400 Electric Cars. Gensol was supposed to invest remaining 20% as per the loan terms. They didn't invest a… pic.twitter.com/ncdMLfFed6

— Congress Kerala (@INCKerala) April 18, 2025

The visit followed an announcement by Gensol to the stock exchanges on 28 January, claiming it had received pre-orders for 30,000 units of its newly launched EVs showcased at the Bharat Mobility Global Expo 2025. However, upon reviewing the documents provided by the company, SEBI found that the orders were memoranda of understanding (MoUs) entered with nine entities for 29,000 cars.

The MoUs were in the nature of an expression of willingness, with no reference to the price of the vehicle or delivery schedules. Therefore, it prima facie appeared that the company was making misleading disclosures to investors, SEBI stated.

In another disclosure dated 16 January, Gensol informed the exchanges regarding a strategic tie-up with Refex Green Mobility Ltd "for the transfer of 2,997 electric four-wheelers" to Refex. As part of the tie-up, Refex was to assume Gensol's existing loan of Rs 315 crore. However, in a disclosure dated 28 March, the proposed takeover by Refex was withdrawn.

In yet another disclosure dated 25 February, Gensol informed the exchanges that it had signed a non-binding term sheet for Rs 350 crore for a strategic transaction involving the sale of Gensol's US subsidiary, Scorpius Trackers Inc. It was noted that the US subsidiary was incorporated on 22 July 2024.

When probed by SEBI regarding the basis of such valuation of Rs 350 crore, Gensol failed to submit any explanation or rationale.

Gems of Gensol Engineering

Thread 🧵 pic.twitter.com/8EjUO9bWwd

— CA Akhil Agarwal (@InvestWithAkhil) April 16, 2025

These were uncovered in a SEBI probe, which prima facie revealed "mis-utilization and diversion of funds of the company in a fraudulent manner by its promoter directors, Anmol Singh Jaggi and Puneet Singh Jaggi, who are also the direct beneficiaries of the diverted funds".

Gensol secured Rs 977.75 crore in loans from IREDA and PFC between FY22 and FY24. Of the loan, Rs 663.89 crore was meant for purchasing 6,400 EVs. However, Gensol admitted to acquiring only 4,704 EVs, worth Rs 567.73 crore, as confirmed by supplier Go-Auto.

Given that Gensol was also required to provide 20 per cent equity contribution, the total outlay should have been Rs 829.86 crore, leaving an unaccounted-for amount of Rs 262.13 crore.

The SEBI probe found that funds meant for EV purchases were often routed back to Gensol or entities linked to the Jaggi brothers. Some of the funds were used for personal expenses of the promoters, such as the purchase of a luxury apartment, transfers to close relatives, and investments benefiting private entities owned by the promoters.

6 crores for mother
2 crores for wife
26 lakh for a golf set
50 lakh in Ashneer Grover's third unicorn
Among line items on how Anmol Singh Jaggi used Gensol funds pic.twitter.com/ZF7E5vQiLG

— Chandra R. Srikanth (@chandrarsrikant) April 15, 2025

In response to these governance lapses, SEBI took several stringent measures, including prohibiting Gensol and its promoters — the Jaggi brothers — from accessing the securities market until further notice. Also, it barred the brothers from holding any directorship or key management position in Gensol.

Additionally, SEBI directed Gensol Engineering to put its planned stock split into the ratio of 1:10 on hold. Following the order, the brothers stepped down as the company's directors.