PFC Files Case: Gensol Caught Using Fake Documents to Secure Loans

State-owned Power Finance Corporation (PFC) has filed a complaint with the Delhi police against Gensol Engineering Ltd promoted by Jaggi brothers for allegedly filing false documents to take loans for buying electric vehicles (EVs).

"PFC has filed a complaint with the Economic Offences Wing of the Delhi police concerning the issuance of falsified documents. PFC is committed to safeguarding its interests and ensuring the recovery of its loan while uploading transparency in its operations," the public sector financial company said in an official statement.

Where Did Gensol Engineering Falter?

Gensol Engineering, which is the parent company of the all-electric vehicle (EV) app BluSmart, a provider of green cab services, allegedly forged letters from its two lenders -- PFC and Indian Renewable Development Ltd (IREDA) --- to portray that it was servicing its debt regularly.

This claim got exposed as the credit rating agencies started verifying the letters with the lenders.

Additionally, PFC said that it is also examining the matter internally under its anti-fraud policy and this investigation will focus on tracking missing delivery receipts for EVs financed by the PFC, an IANS report said.

What Were These Loans Meant For?

These loans were supposed to be for buying EVs but over Rs 200 crore of this amount was routed through a car dealership and sent to other companies linked to the promoters, and some of it was used for luxury purchases, including flats in DLF Camellias, which starts at the price range of Rs 70 crore.

Sebi's Probe

Sebi in an investigation revealed that Gensol has not bee able to account for Rs 262.13 crore of the amount, and this investigation was prompted by an anonymous tip.

Sebi released an interim order on April 15, illustrating what went wrong with Gensol. According to this order, the promoters of Gensol including Anmol and Puneet Jaggi had treated the firm like their personal 'piggy bank'. There were no proper financial controls in place, and the promoters had diverted loan money to themselves or related entities.

The company had secured a loan of approximately Rs 977.75 crore from IREDA and PFC between FY22 and FY24. Out of this money, Rs 663.89 crore was specifically meant for the purchase of 6,400 EVs, while the company was permitted to buy only 4,704 vehicles, worth Rs 567.73 crore.

Further, Sebi's report said that there was "no manufacturing activity" that was found at Gensol Engineering's EV plant in Pune, with only two or three labourers present at the site, which, itself was a leased property.

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