NEW DELHI — The authorities have escalated a fraud investigation into Gensol Engineering Ltd. a clean-energy company, referring the case to the Central Bureau of Investigation (CBI) following suspicions that public officials may be involved in the alleged misuse of nearly a billion rupees in public funds. This signals a new and more intensive phase in a scandal that has already seen the company’s promoters step down and drawn the attention of multiple regulatory bodies.
Initial Probe Reveals Irregularities in Public Loans
The case began with an investigation by the Economic Offences Wing (EOW) of Delhi Police, which was looking into two complaints from state-owned financial institutions: Power Finance Corporation (PFC) and the Indian Renewable Energy Development Agency (IREDA). These entities loaned around ₹977 crore to Gensol between 2022 and 2024. The police examined company employees and financial documents over three months, finding prima facie evidence of possible involvement of public servants. This is why the Delhi Police referred the matter to the CBI, as it is better equipped to investigate such allegations.
SEBI Investigation Uncovers Alleged Misuse of Funds
According to the market regulator, the Securities and Exchange Board of India (SEBI), the company secured a total of ₹977.75 crore in loans. Of this, ₹663.89 crore was specifically meant for the purchase of 6,400 electric vehicles (EVs). However, Gensol only procured 4,704 EVs, leaving ₹262.13 crore unaccounted for. SEBI’s analysis revealed that these funds were allegedly routed to promoters Anmol and Puneet Jaggi and used for purposes unrelated to the sanctioned loans. These included personal expenses such as buying a luxury apartment, transfers to relatives, and investments in private entities owned by the promoters.
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Promoters Step Down and Face Further Action
Anmol and Puneet Jaggi stepped down from their roles as managing director and whole-time director in May. In a plea before a Delhi court, Puneet Jaggi claimed he was not involved in the company’s day-to-day affairs and that his elder brother, Anmol (currently in Dubai), made all management decisions. Meanwhile, the Enforcement Directorate (ED) has frozen the bank accounts of both the promoters and Gensol. On April 24, the ED questioned Puneet Jaggi during raids, but since it cannot make arrests under the Foreign Exchange Management Act (FEMA), he was allowed to go.
Enforcement Directorate Seeks to Widen Probe
The Enforcement Directorate (ED) is also conducting a FEMA violation probe against the company and the promoter brothers. However, to launch a more serious investigation under the Prevention of Money Laundering Act (PMLA), the ED is waiting for a predicate offence agency to register a First Information Report (FIR). The Ministry of Home Affairs (MHA) is expected to soon issue a formal notification for the CBI probe, based on the Delhi Police’s referral, which will enable the ED to proceed with its PMLA investigation.