The Securities and Exchange Board of India (SEBI) on Wednesday upheld the instructions in its interim order against Gensol Engineering, noting that the promoters had didn’t rebut the findings successfully.
The promoters of the corporate, Anmol Singh Jaggi and Puneet Singh Jaggi, had made submissions to the regulator denying the findings and supplied causes for a similar.
However, they didn’t present any supporting proof for denial of the findings within the interim order, SEBI noticed.
In its findings within the interim order, SEBI alleged that the promoters indulged in falsification of conduct letters to collectors, diverted funds borrowed from Power Finance Corporation (PFC) and the Indian Renewable Energy Development Agency (IREDA) for private use, didn’t disclose layering and associated celebration transactions, didn’t report mortgage defaults and made deceptive company disclosures.
Mr. Puneet Jaggi had claimed that he was solely a nominal director and was simply signing paperwork for compliance.
“As Puneet Singh Jaggi appears to also be a direct beneficiary of funds diverted from Gensol through Wellray, his contention that he was not involved in the affairs of Gensol cannot be taken at face value. Accordingly, I am not inclined to accept the submissions of Puneet Singh Jaggi at this stage. However, the investigating authority in this matter shall look into this aspect and examine whether Puneet Singh Jaggi had any active role in the violations or not,” Kamlesh C. Varshney, wholetime member of SEBI stated within the confirmatory order.
In the interim order, SEBI had directed that the promoters step down from the managerial place till additional orders and be barred from dealing in securities market, and a forensic audit be carried out. The promoters had appealed to the Securities Appellate Tribunal (SAT).
“In view of the observations and findings recorded in the above paragraphs, I find that noticees have failed to effectively rebut the prima facie findings recorded in the interim order regarding falsification of conduct letters , submitted to CRAs and diversion/mis-utilisation of funds of Gensol by promoters and promoter related entities. Accordingly, the prima facie findings alleging violation of the provisions …still hold ground,” Mr. Varshney added.
The present observations “are tentative in nature and pending detailed investigation and forensic audit,” Mr. Varshney stated within the order.
