DIVERSIONARY TACTICS

The Gensol saga is the latest in a list of corporate cases where promoters redirected funds at will and whim. It's yet another wakeup call

- KHUSHBOO TIWARI & SAMIE MODAK

Earlier this month, the Securities and Exchange Board of India (Sebi) dropped a bombshell on Gensol Engineering. It barred promoters Anmol Singh Jaggi and Puneet Singh Jaggi from both the securities markets and directorial roles. The charge was that they had allegedly diverted a loan of over ₹262 crore meant for procuring 6,400 electric vehicles (EVs) to buy luxury real estate, including a ₹43 crore apartment in The Camellias, DLF's uber-luxury project at Gurugram, and for personal expenses such as international travel and credit card bills.

Sebi's interim order painted a damning picture: The Jaggi brothers had treated the listed company as their "personal piggy bank," routing funds through shell entities and submitting forged documents to mask loan defaults. The stock plummeted, hitting lower circuits and leaving 100,000 retail investors stranded.

This is not an isolated incident. In 2019, Religare Enterprises faced a similar scandal when the Enforcement Directorate uncovered a $400 million diversion by former promoters, Malvinder and Shivinder Singh. Funds from Religare's subsidiary were allegedly funnelled through a Mauritius-based entity to a company based in tax haven Jersey, allegedly for the promoters' benefit. The Singh brothers' stake dwindled to 0.88 per cent by 2020, yet legal battles continue, with Sebi demanding fines and disgorgement.

Zee Entertainment Enterprises, too, has been embroiled in a fund diversion case since 2023. Sebi accused promoters Subhash Chandra and Punit Goenka of siphoning off ₹200 crore through layered transactions involving 13 entities, some linked to the earlier Shirpur Gold Refinery fraud. The case drags on, with no resolution in sight.