The Indian Renewable Energy Development Agency (IREDA) has classified the loan accounts of Gensol Engineering Ltd and its subsidiary, Gensol EV Lease Ltd, as fraud and reported the matter to the Reserve Bank of India (RBI), intensifying regulatory action against the renewable energy company over alleged financial irregularities.
In a regulatory filing, IREDA said the accounts were classified as fraud in accordance with the Reserve Bank of India’s Master Direction on Fraud Risk Management for non-banking financial companies. The lender stated that the action follows its earlier disclosures concerning the borrowers and is based on alleged financial misconduct identified during its review.
According to IREDA, Gensol Engineering’s loan account, with outstanding dues of approximately ₹453.77 crore, has been classified as a fraud account on allegations of misappropriation, criminal breach of trust, and forgery committed with the intention to facilitate fraud through false documents and electronic records.
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The lender also classified the account of its subsidiary, Gensol EV Lease Ltd, as fraud. The subsidiary has outstanding dues of approximately ₹218.97 crore and has been accused of alleged misappropriation and criminal breach of trust. Combined outstanding dues in the two accounts exceed ₹672 crore.
IREDA said it has already made provisions amounting to 85% of the outstanding exposure in both loan accounts as of March 31, 2026, in accordance with applicable prudential norms.
The latest development follows a series of regulatory actions initiated against Gensol Engineering and its promoters. In April 2025, the Securities and Exchange Board of India (SEBI) issued an interim order alleging diversion of company funds, submission of falsified documents to lenders, and serious corporate governance lapses.
As part of that action, SEBI restrained promoters Anmol Singh Jaggi and Puneet Singh Jaggi from holding key managerial positions in the company and prohibited them from accessing the securities market pending further proceedings.
SEBI’s investigation began after credit rating agencies downgraded Gensol Engineering’s debt to the default category in March 2025. The downgrade followed concerns over delays in debt servicing and suspected falsification of documents submitted by the company regarding its repayment record.
During its investigation, the market regulator also found prima facie evidence suggesting that conduct letters purportedly issued by IREDA and Power Finance Corporation (PFC) had allegedly been forged and used during interactions with lenders.
Apart from classifying the loan accounts as fraud, IREDA has initiated multiple legal recovery measures. The public sector lender has approached the Debt Recovery Tribunal (DRT) to recover its outstanding dues and has also filed insolvency proceedings against Gensol Engineering under the applicable insolvency framework.
The fraud classification is expected to have significant regulatory and financial implications for the company, including closer scrutiny by financial regulators, continued recovery proceedings, and potential action by investigating agencies based on evidence gathered during ongoing inquiries.
According to the Future Crime Research Foundation (FCRF), corporate loan frauds involving forged financial records, diversion of borrowed funds, and falsified documentation highlight the importance of continuous lender due diligence, independent verification of borrower submissions, digital document authentication, and stronger corporate governance mechanisms. Financial institutions should also strengthen post-disbursement monitoring and forensic audit frameworks to identify irregularities at an early stage.
Regulatory and legal proceedings against Gensol Engineering remain ongoing. Further action will depend on the findings of investigations being conducted by the concerned authorities and the outcome of recovery and insolvency proceedings.
