Gensol shares plunge for 14th straight day: What's fueling downturn?
What's the story
Gensol Engineering's shares have been on a free fall for the 14th straight day, dropping 5% today to hit a new lower circuit.
The crisis-ridden company has lost 55% of its market value this month alone.
The fall in share price was triggered after the Enforcement Directorate (ED) raided the firm's offices in Gurugram and Ahmedabad and conducted search and seizure operations.
Regulatory scrutiny
ED's investigation into Gensol Engineering
The company said that during the raids on April 27, the ED seized documents, electronic devices, and financial records.
Orders were also passed under FEMA and the Income Tax Act of 1961 against Gensol Engineering by ED to Axis Bank, ICICI Bank, and HDFC Bank.
However, the details of the orders remain undisclosed.
Legal proceedings
Gensol's uncertain future
Gensol Engineering has said the financial implications of ED's actions remain unclear.
CFO Jabir Mahendi M Aga confirmed the company is seeking legal remedies against the proceedings initiated by ED.
Recently, the Delhi High Court appointed a receiver to take custody of 95 electric vehicles leased to BluSmart by Clime Finance, while restraining Gensol from creating third-party rights over this fleet.
Financial allegations
SEBI's concerns over Gensol's activities
Gensol has faced heightened scrutiny after capital markets regulator SEBI raised concerns over the firm's activities earlier this month.
On April 15, SEBI took multiple actions against Gensol, alleging that it may have diverted funds raised for business purposes toward personal luxury purchases.
The regulator also claimed that Gensol had defaulted on loans, including debt used to finance EV purchases for its ride-hailing start-up BluSmart Mobility.
Linked issues
Gensol Engineering's relationship with BluSmart
Gensol Engineering's troubles are intertwined with those of BluSmart, a company co-founded by Anmol Singh Jaggi, who was also the Managing Director of Gensol until recently.
After SEBI's steps, two major financial institutions, the Power Finance Corporation (PFC) and Indian Renewable Energy Development Agency (IREDA), had filed complaints against Gensol.