The Institute of Chartered Accountants of India (ICAI) said on Wednesday that it is examining the financial statements and the statutory auditor reports of Gensol Engineering and its affiliate BluSmart Mobility for FY24.
In a meeting, the financial reporting review board (FRRB) of the ICAI took a decision to suo moto investigate Gensol and BluSmart Mobility for alleged financial irregularities.
The ICAI’s probe into these two companies will be independent from the ministry of corporate affairs’ (MCA’s) move to look into the Gensol matter. On Monday, the MCA had said that it is examining the interim order issued by the Securities and Exchange Board of India (SEBI) against Gensol Engineering, and will take appropriate steps as per the provisions of the Companies Act 2013.
Last year, the SEBI began its investigation against Gensol after the markets watchdog received a complaint relating to manipulation of share price and diversion of funds in the company. The SEBI asked for information from credit rating agencies ICRA and CARE Ratings who had downgraded Gensol as certain documents shared by Gensol on its debt servicing track record were apparently falsified.
The ratings agencies told SEBI that Gensol provided statements of all lenders except those of IREDA and PFC. Upon seeking confirmation from IREDA and PFC, rating agencies were told that no such letters were issued by these lenders.
SEBI’s probe unearthed fund diversions by the promoters of Gensol – Anmol Singh Jaggi and Puneet Singh Jaggi – who used the funds availed as loans for procuring EVs to buy a high-end apartment in The Camellias, DLF Gurgoan in the name of a firm where the MD of Gensol and his brother are designated partners. The diverted funds were also used for personal luxury expenses such as golf set, travel and shopping.
In its interim order issued in April this year, SEBI restrained the Gensol promoters from holding any key managerial positions in the company. It also barred them from dealing in the securities market over their alleged involvement in fraudulent activities.
BluSmart Mobility is co-founded by the two Gensol promoters. It is an EV-only-ride-hailing start-up.