Financial Misconduct Unmasked: Gensol Engineering Under ED Scrutiny

The Enforcement Directorate is poised to investigate Gensol Engineering for alleged financial misconduct. Frozen shares, linked to a wider betting scam, are part of a broader probe into fund diversion and market manipulation. Gensol’s promoters face accusations of treating the company as personal property, risking investor losses.

The Enforcement Directorate (ED) is gearing up to scrutinize Gensol Engineering Ltd over allegations of fund diversion and financial misconduct, official sources disclosed on Tuesday. As part of the broader investigation, the ED has frozen a significant number of shares pertaining to a person involved in a separate Mahadev betting app scam. This move comes in the wake of a SEBI report that barred Gensol promoters from the securities market for violations, including alleged misuse of loaned funds for personal purchases.

The agency aims to delve into potential breaches under the anti-money laundering law concerning investor losses identified in the SEBI report. Furthermore, potential foreign exchange violations are on the radar, with investigations possibly initiated under the Foreign Exchange Management Act (FEMA). Notably, the ED office in Raipur has taken fresh steps under the Prevention of Money Laundering Act, freezing shares linked to foreign portfolio investors allegedly connected to a Dubai-based 'hawala operator' under scrutiny in the Mahadev case.

The crackdown on Gensol's financial misconduct reveals significant money laundering activities linked to the Mahadev app, transferring crime proceeds out of India and re-investing in Indian stocks under the guise of foreign portfolio investments. Founders Anmol and Puneet Singh Jaggi are under fire for treating Gensol as a personal enterprise, diverting company funds to purchase luxury items and property, damaging shareholder interests as outlined in SEBI's findings.

(With inputs from agencies.)