New Delhi: In a major move to enforce security rights, Catalyst Trusteeship Limited, acting on behalf of Power Finance Corporation (PFC), has invoked 25.65 lakh pledged shares of Gensol Engineering Limited. The shares, pledged by Gensol Ventures Private Limited, represent 6.67% of Gensol’s equity capital and were transferred to the trustee on June 10, 2025, according to a regulatory filing made on Monday.
Despite this invocation, Gensol Engineering’s total equity base remains unchanged at 3.84 crore shares with a face value of ₹10 each.
PFC Declared Gensol Loan Fraudulent, Made Full Provision
The development comes shortly after PFC classified a ₹263 crore loan to Gensol as fraudulent, citing findings from an internal inquiry. The loan had been disbursed to finance 3,000 electric vehicles (EVs), but discrepancies emerged when only 2,741 vehicles were delivered, leaving 259 units undelivered despite full payment.
PFC Chairperson and Managing Director Parminder Chopra confirmed the fraud designation in May and noted that a full provision had been made against the outstanding amount.
Recovery Actions Intensify; Bank Guarantees and Legal Channels Invoked
As part of its broader recovery strategy, PFC has already recovered ₹44 crore through bank guarantee invocations. The latest invocation of pledged shares further signals PFC’s intention to pursue all available enforcement mechanisms, including possible insolvency proceedings under the IBC if recoveries remain insufficient.
Simultaneously, the Indian Renewable Energy Development Agency (IREDA) has initiated legal proceedings before the Debt Recovery Tribunal (DRT) and the National Company Law Tribunal (NCLT) to recover a staggering ₹728.95 crore from Gensol-related entities.
NCLT Freezes Gensol Accounts, Cites Evidence of Fraud
Adding to the company’s troubles, the Ahmedabad bench of the NCLT, acting on a referral from the Ministry of Corporate Affairs (MCA), has frozen bank accounts and lockers of Gensol Engineering, its subsidiaries, and certain individuals. The tribunal cited prima facie evidence of-
- Systemic fraud
- Fund diversion
- Corporate governance violations
The interim NCLT order also barred directors and promoters from disposing of or mortgaging assets, deepening the legal quagmire.
Promoters Barred by SEBI, Accused of Misusing Company Funds
Promoters Anmol and Puneet Singh Jaggi have been debarred by SEBI from holding board-level positions. SEBI’s interim order accused the brothers of treating Gensol as a “personal piggybank”, with funds meant for EV financing allegedly diverted for personal and unrelated purposes.
Following the regulatory backlash, both promoters have resigned, and the company is now under scrutiny by SEBI, MCA, the Serious Fraud Investigation Office (SFIO), and the Enforcement Directorate (ED).
Implications for Gensol and Its Creditors
The invocation of pledged shares by Catalyst Trusteeship marks a significant escalation in the Gensol case. It:
- Strengthens PFC’s position in recovery negotiations
- Signals tighter lender control over assets
- Adds further uncertainty to Gensol’s governance and future operations
With multiple regulatory and legal probes active, and mounting creditor pressure, Gensol Engineering faces severe financial and reputational damage. The company’s ability to secure further funding or regain investor confidence remains in serious doubt.
