Gensol Engineering's CFO resigns amid regulatory investigations from SEBI, ED
What's the story
Gensol Engineering's Chief Financial Officer Jabirmahendi M Aga has resigned from his position.
His exit comes just days after the company's founders, Anmol Singh Jaggi and Puneet Singh Jaggi, resigned.
In his resignation letter, Aga noted that the "disorganization of critical data across various departments is hindering" Gensol's ability to respond effectively to ongoing inquiries by multiple regulatory authorities.
Regulatory investigations
Resignation amid regulatory scrutiny
Aga's exit comes at a time when Gensol Engineering is being investigated by multiple regulatory authorities, including the Securities and Exchange Board of India (SEBI), the Ministry of Corporate Affairs, and the Enforcement Directorate (ED).
The investigations were launched after SEBI issued a temporary order in April, alleging that the Jaggi brothers diverted funds from Gensol Engineering for personal use.
The government had issued these funds to support the purchase of electric vehicles.
Legal challenges
Insolvency proceedings initiated against Gensol Engineering
One of the lenders, the Indian Renewable Energy Development Agency (IREDA), has moved the National Company Law Tribunal (NCLT) to initiate insolvency proceedings against Gensol.
The NCLT accepted this plea last week and issued a notice to Gensol Engineering.
The legal action adds another layer of complexity to the company's ongoing challenges.
Business fallout
Impact on affiliated companies and directors
The financial woes of Gensol Engineering have also affected BluSmart, an electric ride-hailing company co-founded by the Jaggi brothers.
BluSmart had suspended operations in April amid a cash crunch and failed fundraising attempts.
Following SEBI's findings, three independent directors have also resigned from Gensol Engineering's board, adding to the company's leadership woes.