Image Source: India Today
Power Finance Corporation (PFC) is tightening its screws on Gensol Engineering following the discovery of suspected fraud in the form of fake documents and diversion of funds in a significant electric vehicle (EV) leasing transaction with BluSmart Mobility. The scandal has prompted a flurry of regulatory and legal actions, with PFC actively pursuing all available recovery options.
EOW Complaint On Falsified Documents:
PFC has lodged a formal complaint with the Economic Offences Wing (EOW) following the discovery that Gensol's promoters had provided spurious documents to credit rating agencies to mislead them about the repayment status of loans. There is an ongoing internal probe, and the company is acting as per its anti-fraud policy to the letter.
Outstanding Loan and Repayments:
Of the ₹3.52 billion funded by PFC to Gensol for renting out 3,000 EVs to BluSmart Mobility, ₹450 million has been repaid by Gensol, and a principal balance of ₹3.07 billion remains as on April 18, 2025. PFC has security over the vehicles, Gensol's equity shares, and promoters' personal guarantees.
Fears of Loan Defaults Mount:
BluSmart suspended services on April 17, stopping lease payments that were the main source of repayment for the loans. PFC and IREDA are now thinking of auctioning the hypothecated EVs to recover dues, as Gensol's account could be marked as a non-performing asset (NPA).
Multi-Agency Investigations
The promoters of Gensol have been barred by the Securities and Exchange Board of India (SEBI) from capital markets and management roles, accusing them of diverting funds and misusing more than ₹200 crore for personal purchases. The Ministry of Corporate Affairs and Enforcement Directorate are also investigating Gensol for financial impropriety and money laundering.
Credit Rating Downgrade and Promoter Fallout:
Credit rating agencies CARE and ICRA lowered the rating of Gensol to 'D' (default). Promoters Anmol Singh Jaggi and Puneet Singh Jaggi have resigned from management positions, and more than 80% of their shares are pledged.
PFC's Commitment to Recovery:
PFC has reaffirmed its commitment to upholding its interests, being transparent, and pursuing every legal and financial recourse to ensure recovery of the loan and protection of public funds.
"In view of the disturbing indications, PFC has initiated an internal investigation as per our anti-fraud policy. We have also reported the case to the Economic Offences Wing with respect to the issuance of these forged documents." — PFC statement
Source: The Hindu Business Line, Economic Times, India Today, Moneycontrol, Business Standard, News18
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