India NCLT Orders To Issue Notice To Gensol Over IREDA’s Insolvency Petition
NCLT rejects IREDA’s plea to appoint interim resolution professional for Gensol at today’s hearing and posts the case for hearing on 3 June
(The Corner Office Journal) -- India’s National Company Law Tribunal (NCLT) today ordered to issue a notice to Gensol Engineering Ltd. following Indian Renewable Energy Development Agency Ltd.’s (IREDA) insolvency petition against the company.
State-run IREDA’s lawyer during a hearing today urged the NCLT to appoint an interim resolution professional (IRP) for Gensol, citing the Securities and Exchange Board of India’s (SEBI) interim order against the company.
“By virtue of SEBI order, the company is now headless. Directors have walked out, and the company has projects worth crores of rupees. Somebody needs to manage the show. That’s what the SEBI's finding is,” the lawyer argued.
The NCLT’s Ahmedabad bench, comprising Judicial Member Shammi Khan and Technical Member Sanjeev Kumar Sharma, rejected IREDA’s request to appoint an IRP at the initial hearing today.
The bench, which directed to issue the notice, said it will hear the parties first and posted the case for hearing on 3 June.
The Background
The development comes after IREDA, which is represented by Shardul Amarchand Mangaldas, filed an insolvency petition on 14 May against Gensol under Section 7 of the Insolvency & Bankruptcy Code, claiming a default of 510 crore rupees ($60 million).
IREDA, a non-banking financial company, provides financial assistance for setting up projects related to new and renewable energy sources as well as energy efficiency/conservation initiatives.
Gensol has been in the spotlight after SEBI via an interim order barred the company’s promoters from the securities market for alleged fund diversions and corporate governance lapses.
On 12 May, Gensol announced the resignation of its promoters -- Managing Director Anmol Singh Jaggi and Whole Time Director Puneet Singh Jaggi -- from the company. The Jaggi brothers resigned due to the direction given under the SEBI’s interim order.
BluSmart Mobility, an e-cab service promoted by Anmol Singh Jaggi, has suspended operations since the SEBI order.
The capital markets regulator has also appointed a forensic accountant and investigator, who will conduct the forensic audit of Gensol’s financial statements from FY22 to FY25. The forensic audit is being conducted by Raju and Prasad, Chartered Accountants.
Meanwhile, Gensol has received a relief from the Securities Appellate Tribunal to file its response on the SEBI’s interim order within two weeks.
Note: $1 = 85.5147 Indian rupees
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