Gensol promoters, Anmol and Puneet Singh Jaggi, detained in a FEMA case

The Gensol Engineering Ltd promoters, Anmol and Puneet Singh Jaggi, were detained on Thursday under the provisions of the Foreign Exchange Management Act (FEMA) amid charges of alleged financial misconduct and diversion of funds.

Last week, Securities and Exchange Board of India (Sebi) had barred Gensol's promoters-brothers Anmol and Puneet Jaggi-from accessing stock markets and ordered a forensic probe into their listed renewable energy firm.

An interim report of the markets regulator pointed to fund diversion by the brothers and governance failures within the company. The brothers face allegation of misuse of term loans availed of by Gensol from state-run IREDA and PFC.


Gensol's share price has crashed by over 22% since the release of Sebi's interim report.

Fund Diversion
Between FY22 and FY24, Gensol secured Rs 977.75 crore in loans from Ireda and PFC, with Rs 663.89 crore meant for purchasing 6,400 EVs. However, Gensol admitted to acquiring only 4,704 EVs worth Rs 567.73 crore, as confirmed by supplier Go-Auto.

Given that Gensol was also required to provide a 20 per cent equity contribution, the total outlay should have been Rs 829.86 crore, leaving Rs 262.13 crore unaccounted for.

Sebi probe found that funds meant for EV purchases were often routed back to Gensol or entities linked to the Jaggi brothers. Some of the funds were used for personal expenses of the promoters, such as the purchase of a luxury apartment, transfers to relatives, and investments benefiting private entities owned by the promoters.

One of the most striking revelations was the use of Rs 42.94 crore, routed through Anmol Singh Jaggi's Capbridge Ventures, to finance a luxury apartment in DLF Camellias. Additionally, Rs 50 lakh was allegedly invested in Ashneer Grover's startup Third Unicorn, with other funds covering personal travel and leisure.

Further, Rs 6.20 crore was allegedly diverted to Anmol's mother Jasminder Kaur, while his wife Mugdha Kaur Jaggi received Rs 2.98 crore.

Extravagant personal spending included Rs 26 lakh on a golf set and Rs 3 lakh spent via MakeMyTrip for travel.

Similarly, Puneet allegedly diverted Rs 1.13 crore to his wife and Rs 87.52 lakh to his mother, with some funds used for credit card payments.

Sebi noted that the promoters were running the company like their personal "piggy bank", routing funds to related parties and spending without regard for shareholder interest.

The result of these transactions would mean that these diversions would, at some time, need to be written off from the company's books, ultimately resulting in losses to the investors, Sebi said.