New Delhi: Indian Renewable Energy Development Agency (Ireda), a government-owned financial agency, has filed for insolvency against Gensol Engineering. This step comes after Gensol failed to repay a loan of ₹510 crore. The petition was filed under Section 7 of the Insolvency and Bankruptcy Code and was disclosed in a stock exchange filing on Wednesday.
If the National Company Law Tribunal (NCLT) accepts this insolvency plea, a court-appointed professional will take over the debt resolution process. All lenders can then register their claims to recover dues. In such situations, shareholders often lose all their investments, as the value of shares could drop to zero.
Interestingly, Gensol Engineering’s stock rose by 5 per cent on the same day, closing at Rs 60 per share.
The company is also under serious investigation by the Securities and Exchange Board of India (Sebi). Sebi is looking into reports that the promoters may have moved money from the company for personal use. Because of this probe, the founders—Anmol Singh Jaggi and Puneet Singh Jaggi—stepped down from the board of Gensol. Anmol was the Managing Director, and Puneet was the Whole-time Director. They said they resigned following Sebi's directions.
Before this, Ireda had started an internal review on April 25. It followed rules from the Reserve Bank of India and Ireda’s own checks. Ireda found that Gensol's promoters had sold off their company shares without informing or getting permission from lenders, which broke the loan agreement. Ireda also filed a complaint with the Economic Offences Wing on April 24 about this matter.
This situation has raised big concerns about the financial health and governance at Gensol.
