ED may probe Gensol Engineering under anti-money laundering law

The Enforcement Directorate may launch an investigation into the alleged diversion of funds and financial misconduct by the promoters of Gensol Engineering Ltd, official sources said on Tuesday.

The federal probe agency has also frozen a fresh few lakh shares in Gensol of a person being investigated in a separate case linked to the Mahadev betting app scam, they said.

It is learnt that the ED is analysing the recent SEBI report that barred the promoter brothers of Gensol—Anmol Singh Jaggi and Puneet Singh Jaggi—from the securities market for various violations apart from accusations of siphoning off loan funds from their publicly listed company for personal use.

The ED may initiate a probe under the anti-money laundering law to look into the diversion of funds and loss to investors of Gensol as stated in the SEBI report. The agency will also look for possible violations of the foreign exchange law that are investigated under the Foreign Exchange Management Act (FEMA), the sources told PTI.

The Raipur office of the agency also froze, under the Prevention of Money Laundering Act (PMLA), a fresh few lakh shares in the company that are allegedly linked to some foreign portfolio investors (FPIs). The sources indicated that the shares were held by a company linked to a Dubai-based "hawala operator" being investigated in the Mahadev app case.

The freezing action came after the ED carried out fresh searches in the Mahadev case on April 16 and said in a statement on Monday that it has frozen securities, bonds and demat accounts worth a total Rs 573 crore.

The ED also said its probe found that the "proceeds of crime generated by the betting platform and its linked syndicates were being transferred out of India and later deployed in the Indian stock market in the name of FPIs based in Mauritius, Dubai, etc".

The agency had frozen around five lakh shares of Gensol in February last year too as part of the Mahadev app probe.

Gensol Engineering Ltd (GEL), in its regulatory filing for quarters ending March 2025 and December 2024, has said that the ED (Raipur office) holds a total of 5,20,063 shares which is 1.35 per cent of its shareholding. These shares were held by Zenith Multi Trading DMCC, an entity allegedly linked to Hari Shankar Tibrewal.

The ED has earlier said Tibrewal is a Dubai-based "hawala operator" claiming he partnered with the promoters of Mahadev app in illegal operations for a betting website named 'skyexchange'.

In March last year, the ED said that Tibrewal "used Suraj Chokhani (an accused in the case) to launder and hide proceeds of crime under the guise of share investment for Indian companies".

"Searches at the premises of Chokhani in Kolkata found that the major source for these investments has been collected by way of receiving bank entries against cash in these companies and utilising the proceeds for investment in share market," it had alleged in a statement.

As of February 29, 2024, the agency said the Indian companies under control of associates of Tibrewal held around securities worth Rs 580 crore in stock portfolios and the foreign entities also invested in India via the FPI route and as of the same date, they were found to be holding securities worth Rs 606 crore in stock portfolios.

Tibrewal, it claimed, was also involved in "manipulation" of the stock market in collusion with the promoters of some listed companies and using his "immense" capital, he used to create temporary fluctuations in share prices, driving them upwards, and then withdraw funds once the prices reached a desirable level.

The Jaggi brothers have launched two prominent ventures—Gensol Engineering and BluSmart Mobility,

BluSmart was co-founded by Anmol Singh Jaggi and it provides electric car services in Delhi-NCR, Bengaluru and Mumbai.

At the heart of the ED's investigation are findings of the SEBI's interim order that said Gensol Engineering's promoters treated the listed company as a proprietary firm, diverting corporate funds to buy a high-end apartment in The Camellias, DLF Gurgaon, splurging on a luxury golf set, paying off credit cards, and transferring money to close relatives.

The Securities and Exchange Board of India (SEBI) findings also said that there was a pattern of fund diversion by the Gensol promoters pointing to governance failures within the company.

Alleged misutilisation of term loans availed by Gensol Engineering from IREDA and PFC were also recorded in the SEBI report.

SEBI also 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 has said.

Listed on BSE and NSE, GEL is engaged in providing solar consulting services, Engineering, Procurement and Construction (EPC) services, leasing of electric vehicles, etc.