**Ireda Initiates Insolvency Proceedings Against Gensol Engineering for ₹510 Crore Default**
The Indian Renewable Energy Development Agency (Ireda) has filed an insolvency application against Gensol Engineering Ltd, citing a default of ₹510 crore. This action, taken on Wednesday, follows a complaint lodged by Ireda with the Economic Offences Wing (EOW) of the Delhi Police, alleging that Gensol submitted falsified documents and diluted promoter shares without the necessary approvals from lenders.
In a formal exchange filing, Ireda stated, “In furtherance to our earlier letter dated 25.04.2025 regarding M/s Gensol Engineering Limited, we inform you that the Company has filed an application today, May 14, 2025, under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s Gensol Engineering Ltd, for an amount of default of ₹510,00,52,672/- (Rupees Five Hundred Ten Crore and Fifty Two Thousand Six Hundred and Seventy Two Only).”
Under Section 7 of the Insolvency and Bankruptcy Code (IBC), a financial creditor can initiate the corporate insolvency resolution process (CIRP) against a corporate debtor when a default occurs. Ireda previously indicated that while Gensol’s account is under stress, it has not yet been classified as a non-performing asset (NPA). The agency has also commenced an internal review in line with Reserve Bank of India (RBI) guidelines and its due diligence protocols.
The situation escalated after the Securities and Exchange Board of India (Sebi) issued an interim order on April 15, barring Gensol’s promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, from trading in the securities market and holding key managerial positions in Gensol or any other listed company. A forensic audit was also mandated. Sebi’s investigation revealed that the founders of Gensol allegedly misappropriated loans from state-run lenders, including Power Finance Corp. (PFC) and Ireda, for personal and unrelated expenses. Gensol reportedly forged documents to misrepresent its debt servicing status to these lenders.
Between FY22 and FY24, Ireda and PFC extended loans of ₹311.5 crore and ₹352.4 crore, respectively, to Gensol for acquiring electric vehicles for its ride-hailing service, BluSmart. Gensol contributed an additional ₹166 crore in equity, totaling ₹829.9 crore intended for the purchase of 6,400 electric cars. However, the company only acquired 4,704 vehicles for ₹567.7 crore, leaving ₹262.1 crore unaccounted for. PFC has also filed a complaint with the EOW regarding Gensol’s submission of falsified documents.
In conclusion, the ongoing legal and financial challenges faced by Gensol Engineering highlight significant concerns regarding corporate governance and financial integrity within the renewable energy sector.
**FAQ**
**What led to Ireda’s insolvency application against Gensol Engineering?**
Ireda filed the application due to a default of ₹510 crore by Gensol Engineering, following allegations of falsified documents and unauthorized share dilution.