**Gensol Engineering Enters Corporate Insolvency Amid Loan Defaults**
The National Company Law Tribunal (NCLT) in Ahmedabad has initiated corporate insolvency proceedings for Gensol Engineering Ltd, following a petition from the Indian Renewable Energy Development Agency Ltd (Ireda). The plea highlighted loan defaults totaling ₹510 crore. The tribunal, led by judicial member Shammi Khan and technical member Sanjeev Kumar Sharma, issued the order under Section 7 of the Insolvency and Bankruptcy Code (IBC), appointing an interim resolution professional (IRP) to oversee the company’s operations.
Ireda’s petition emphasized the urgent need for management oversight, stating that Gensol had become “headless” after its leadership departed amid regulatory scrutiny. Ireda’s counsel expressed concerns about the company’s future, noting, “Directors have walked out, and the company has projects worth crores of rupees. Somebody needs to manage the show.”
The application also pointed to a significant breakdown in internal controls and corporate governance at the publicly listed renewable energy firm, accusing its promoters of treating the company as a personal asset. Ireda raised alarms about Gensol’s extensive order book, which includes capital-intensive renewable EPC contracts awarded by government and public sector entities.
The appointed IRP will take over Gensol’s management and establish a committee of creditors (CoC) to evaluate resolution proposals. If a plan is not approved within 180 to 330 days, the company could face liquidation. Ireda initially notified Gensol on April 25 and revealed on May 14 that it had filed for insolvency. Since then, additional financial creditors have also initiated insolvency proceedings against the company.
On May 28, the NCLT permitted the central government to freeze the bank accounts and lockers of Gensol Engineering, its ten subsidiaries, and several associated individuals. Gensol and its affiliates, including BluSmart Premium Fleet and Matrix Gas & Renewables, sought relief from the National Company Law Appellate Tribunal (NCLAT) regarding the asset freeze but were instructed to return to the NCLT for assistance.
In parallel, state-run lenders Ireda and Power Finance Corporation (PFC) filed separate petitions with the tribunal to recover a combined total of approximately ₹992 crore. Gensol’s challenges intensified following a Securities and Exchange Board of India (Sebi) interim order on April 15, which accused promoters Anmol Singh Jaggi and Puneet Singh Jaggi of misappropriating company funds for personal luxury expenses and defaulting on loans, particularly those related to electric vehicles for BluSmart, an EV ride-hailing service founded by Anmol. Sebi further alleged that the company misled investors by exaggerating its electric vehicle procurement capabilities, despite limited activity at its manufacturing facilities.
**FAQ**
**What led to Gensol Engineering’s insolvency proceedings?**
Gensol Engineering entered insolvency proceedings due to loan defaults amounting to ₹510 crore, prompting Ireda to seek urgent management oversight amid concerns over corporate governance and leadership departures.
