The Securities Appellate Tribunal (SAT) on Wednesday refused to stay an interim order of the Securities and Exchange Board of India (SEBI) that barred Gensol Engineering Ltd (GEL) and its promoter-directors Anmol Singh Jaggi and Puneet Singh Jaggi from accessing the securities market amid allegations of fund diversion, forgery and misleading disclosures.
SAT directed Gensol to file its reply to the interim order passed by SEBI and further directed the market regulator to pass a final order within four weeks of hearing Gensol.
SEBI in April barred Gensol Engineering and its promoters from the securities markets till further orders in a case related to alleged fund diversion and governance lapses. The regulator has also debarred from holding the position of a director or key managerial personnel in Gensol until further orders.
Further, the markets watchdog directed GEL to put on hold the stock split announced by it.
The order came after the SEBI received a complaint in June 2024 relating to the manipulation of share price and diversion of funds from GEL and thereafter started examining the matter. Overall, brothers Anmol and Puneet Singh Jaggi, promoters of EPC firm Gensol and EV cab service BluSmart, allegedly diverted Rs 262 crore — loaned by government-owned lending agencies to procure 1,700 electric cars — towards personal indulgences and related-party entities.
Based on its investigation, SEBI also found that GEL misled investors by claiming it had received pre-orders for 30,000 of its newly launched EVs at the Bharat Mobility Global Expo in January.
In a 29-page interim order, SEBI said, “The prima facie findings have shown mis-utilisation and diversion of funds of the company (GEL) 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”.
In its appeal before SAT, GEL contended that the SEBI order is “illegal, unjustified, and unwarranted,” and fails to meet the statutory threshold for issuing such interim directions without a hearing.
The company also argued that the order does not establish any pressing urgency, pointing out that the investigation stemmed from a complaint received nearly 10 months earlier in June 2024. It accuses SEBI of misusing its powers under Sections 11 and 11B of the SEBI Act.
GEL claimed that SEBI relied on ‘selective’ and biased facts and presented a skewed narrative while ignoring explanations and business context behind the transactions.
