Gensol controversy: IREDA files complaint with EoW
Gensol Engineering Controversy: IREDA Files EoW Complaint Over Fund Mismanagement
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IREDA has initiated an internal review and filed a complaint with the Economic Offences Wing regarding Gensol Engineering’s alleged fund mismanagement.
Overview of the Gensol Engineering Controversy
The Indian Renewable Energy Development Agency (IREDA) has taken significant action against Gensol Engineering following allegations of fund mismanagement and document falsification. The state-run power sector lender has filed a formal complaint with the Economic Offences Wing (EoW) on April 24, 2025, marking a critical development in this ongoing financial controversy.
IREDA’s Internal Investigation
In response to recent developments, IREDA has initiated a comprehensive internal review in accordance with RBI guidelines and Gensol Engineering’s due diligence protocols. The Investigation and Risk Committees are actively examining the matter, focusing on allegations of fund mismanagement and document falsification.
Key Development
IREDA has clarified that while Gensol’s account is currently under stress, it has not been classified as a Non-Performing Asset (NPA). The lender has emphasized its commitment to responsible action and will provide updates to all stakeholders once the assessment is complete.
Allegations of Fund Mismanagement
The controversy escalated when Power Finance Corporation (PFC), another state-run power sector lender, filed a complaint with the EoW regarding Gensol Engineering promoters allegedly submitting fake documents to rating agencies. IREDA has confirmed that it did not issue the letters referenced in these falsified documents.
Unauthorized Share Dilution
A significant breach of contract occurred when Gensol’s promoters diluted their shareholdings without obtaining prior approval from the lenders. This unauthorized action has prompted IREDA to take legal action through the Economic Offences Wing.
Financial Impact
Gensol Engineering received a total of ₹977.75 crore in term loans from IREDA and PFC. Of this amount, ₹663.89 crore was specifically allocated for the purchase of 6,400 electric vehicles (EVs). However, the company only procured 4,704 EVs, raising questions about the utilization of the remaining funds.
Loan Details and EV Procurement
The loan agreement between IREDA, PFC, and Gensol Engineering included specific terms regarding the use of funds for EV procurement. The discrepancy between the allocated funds and actual procurement has become a focal point of the investigation.
| Loan Component | Amount (₹ crore) | Purpose |
|---|---|---|
| Total Term Loan | 977.75 | General Business Operations |
| EV Procurement | 663.89 | Purchase of 6,400 EVs |
| Actual EVs Procured | 4,704 | Shortfall of 1,696 EVs |
Next Steps and Stakeholder Updates
IREDA has assured stakeholders that appropriate actions regarding collaterals and recoveries will be taken based on the outcome of the ongoing review. The lender has requested all concerned parties to refrain from speculation while the investigation is in progress.
Moving Forward
As the investigation continues, IREDA remains committed to maintaining transparency and taking appropriate actions to protect the interests of all stakeholders. The outcome of the EoW complaint and internal review will determine the next steps in this significant financial controversy.
Published on April 25, 2025
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