2 more independent directors resign from Gensol Engg

The spate of resignations continued at Gensol Engineering as two independent directors, Harsh Singh and Kuljit Singh Popli, stepped down from their positions. This came a day after promoters Anmol Singh Jaggi and Puneet Singh Jaggi offered to step down.

The resignations come as the regulator barred the promoters from the securities market, citing serious financial misconduct.

Both the directors mentioned that recent events have pained them immensely and it is unfortunate that they had to resign in such difficult circumstances.

In an interim order, Sebi said there is a “complete breakdown” of corporate governance at Gensol, a renewable energy and electric vehicle (EV) firm.

The regulator accused the promoters of treating the listed company like a “personal piggy bank,” diverting funds for luxury purchases, including a high-end apartment in Gurgaon’s DLF Camellias and a Rs 26 lakh golf set.

The regulator's probe, triggered by a June 2024 complaint, found that Gensol misused Rs 977.75 crore in loans from IREDA and PFC, meant for buying 6,400 EVs. Only 4,704 vehicles were purchased, leaving over Rs 207 crore unaccounted for.

Funds were allegedly funneled to promoter-linked entities like Go-Auto and Capbridge Ventures, with some used for personal expenses.

Gensol Engineering said it will fully cooperate with the forensic audit to be conducted at the behest of Sebi. The regulator will appoint a forensic auditor to thoroughly examine the books of accounts of the company and its related entities.

The turmoil at Gensol threw the spotlight on corporate governance in India, where Sebi chief Tuhin Kanta Pandey Thursday said it is essential to protect shareholder interests, particularly those of minority shareholders.

Speaking at a CII conference, Pandey said for listed companies, robust governance mechanisms are essential for enhancing investor confidence through transparent disclosures, board independence, and effective oversight.

Pandey further noted that Sebi will continue to expect a higher bar on governance, but the true and lasting change must come from within the corporate boardrooms.