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The National Financial Reporting Authority (NFRA) has launched a preliminary inquiry into the books of Gensol Engineering following fraud allegations, according to Ravneet Kaur, the head of the audit regulator.
The move follows a reference by the Securities and Exchange Board of India (Sebi), said Kaur, who also helms the competition regulator. She was speaking on the sidelines of an event Tuesday.
Since the release of Sebi’s interim report on April 15, Gensol’s shares have fallen by more than 40% in the last month. On Tuesday, the shares closed at Rs 70.99 apiece on the BSE.
According to the report, Gensol had borrowed Rs 977.75 crore from lenders. Out of this, Rs 663.89 crore was meant for buying 6,400 electric vehicles (EVs) that were to be leased to BluSmart, a related company. However, Gensol admitted in its response to Sebi in February that only 4,704 EVs had been purchased. This raised questions about where the rest of the loan amount had gone.
The loans in question were taken from state-run lenders including the Indian Renewable Energy Development Agency (IREDA) and Power Finance Corporation (PFC). Sebi has alleged that the promoters misused part of these funds. There are also concerns that the company may have diverted money and failed to follow good governance practices.
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