Ireda files compliant with Economic Offences Wing against Gensol

New Delhi: State-run Indian Renewable Energy Development Agency (Ireda) has filed a complaint with the Economic Offence Wing (EoW) of the Delhi Police against clean tech firm Gensol Engineering Ltd for alleged submission of falsified documents and dilution of promoters shares without lenders' approval.

In a regulatory filing on Friday, Ireda also said that following recent developments concerning Gensol and its promoters and associate companies, it has initiated an internal review in accordance with the guidelines of the Reserve Bank of India (RBI) and its own due diligence protocols.

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Gensol's account is currently under stress but is not classified as a non-performing asset (NPA), it said.

"Regarding communications from credit rating agencies on the falsified documents, Ireda clarified that it did not issue the letters they referred to. The promoters have diluted their shareholdings without lenders approval, constituting breach of contract. In light of this, Ireda has filed a complaint on above matters with the Economic Offences Wing (EoW) against Gensol on 24 April 20," it said.

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Gensol allegedly forged letters from Power Finance Corp. Ltd (PFC) and Ireda to show that it was regular in its debt-servicing obligations towards the lenders, which rating agency Icra had earlier highlighted in a statement. Another rating agency Care also mentioned communication such as no objection certificates from the lenders.

The development comes just days after PFC, also a state-run lender, said that it has filed a complaint with the Economic Offences Wing (EoW) over the alleged filing of falsified documents by Gensol. On 22 April, PFC said that it has approached the EoW.

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Noting that its investigation and risk committees are closely examining the matter, Ireda said: "Appropriate actions regarding collaterals and recoveries will be taken based on the outcome of the review."

"Ireda is committed to acting responsibly and will update all stakeholders once the company’s assessment concludes. Ireda requests all concerned parties to refrain from speculation while the investigation is ongoing," it said.

An interim order by market regulator Sebi (Securities and Exchange Board of India) on 15 April, barred Gensol’s promoters—Anmol Singh Jaggi and Puneet Singh Jaggi—from trading in the securities market, and from holding any key managerial post in Gensol or any other listed company. Additionally, Gensol’s planned 1:10 stock split has been halted, and a forensic audit ordered.

Sebi in its investigation had found that the founders of the cleantech company had siphoned off loans availed from state-run lenders PFC and IREDA for non-related and personal expenses. It also found the company forged documents to show that it was regular in servicing its debt towards the lenders

Between FY22 and FY24, Ireda and PFC lent Gensol ₹311.5 crore and ₹352.4 crore, respectively, for buying electric cars. Gensol put up another ₹166 crore of equity capital, bringing the total to ₹829.9 crore. The money was to be used to purchase 6,400 electric cars. However, the company bought only 4,704 cars for ₹567.7 crore, leaving ₹262.1 crore unaccounted for, the interim order of Sebi said.