Jaggis' promises to Gensol directors remained unmet

Promoters of Gensol Engineering Ltd (GEL) had assured the board that they would manage the company's debt better and get a Big Four auditor to vet related party transactions (RPTs), promises that remained unfulfilled even as the regulator cracked the whip on Tuesday.

- Nehal Chaliawala & Varun Sood

Meanwhile, Gensol's seven-member board has shrunk to two following the ban on its two promoters and the exit of three independent directors.

Arun Menon who had joined the board on 19 April 2022, and Kuljit Singh Popli who had joined on 10 June 2024 stepped down this week. Gensol is yet to disclose Popli's exit to the stock exchanges. Earlier on 13 March, Rajesh Jain left the board.

The directors who quit flagged Gensol's myriad RPTs and over-leverage in its rush to unrelated businesses like electric vehicle leasing and manufacturing. While the promoters promised to hive off the leasing business once it achieved scale, the promise was never met, three people familiar with the matter said.

"I was told that Deloitte has been appointed, but I later learnt that nothing like that happened," one of the three people said on the condition of anonymity.

In his resignation letter addressed to Anmol Singh Jaggi on Tuesday, Menon said he had sought clarity regarding the debt position in July-August 2024. Jaggi had proposed to restructure debt to reduce interest burden, Menon claimed. Menon's letter said he had even proposed to help restructure the debt to reduce interest burden.