Not only investors, but also Gensol promoters also take independent directors to ride in the car

Arun Menon, who joined the board on April 19, 2022, and Kuljit Singh Popli, who joined June 10, 2024, resigned this week. Earlier on March 13, Rajesh Jain left the board.

Exit the numerous directors of Gensol’s RPTs and are eager to provide excessive loans to unrelated businesses such as electric car rental and manufacturing. Three people familiar with the matter said that while the sponsor promised that once the scale was reached, the promise would not be fulfilled, the promise was never fulfilled.

“I was told that Deloitte had been appointed, but then I learned that nothing like that happened,” one of the three said on anonymity.

In his resignation letter, Menon said in a letter to Anmol Singh Jaggi on Tuesday that he had requested clearance of the debt positions from July to August 2024. Jaggi proposed restructuring of debts to ease interest burdens. Menon’s letter said he even suggested helping to restructure debts to reduce interest burdens.

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“It never progressed when you told me you would call back,” he wrote in the letter. Menon wrote that he even sought a meeting with the company’s chief financial officer twice, but nothing was made sense. “Increasingly focused on gel balance sheets to fund capital expenditures in other businesses [sic.]; and the sustainability of such high debt costs for serving gels. ” he wrote.

According to the second person, the company has a good solar engineering, procurement and construction (EPC) business and its balance sheet into the electric vehicle leasing and manufacturing industries extends its balance sheet.

“It’s not that I haven’t expressed my concern. Many times, there were discussions about why Gensol had EV rental and manufacturing while the solar EPC business was running well. The sponsor assured us that they would sell the business, but let’s take some time to make the business sustainable,” the person said on anonymous condition.

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Gensol borrowed 6,400 cars to buy, but actually bought only 4,704. The person said board members were told the company was awaiting the rest of the delivery.

To be sure, all three said the sponsors appear transparent, coming, and treating employees well when they join the board.

“Well, the promoters seem to be a good person. They have a vision and the company is doing a great job. So, I joined. We all made mistakes, didn’t we?” The person added.

Who is in the driver’s seat?

Until last month, Gensol’s board of directors was composed of seven members. With the withdrawal of three directors and an injunction against Jaggs, the board’s strength has dropped to two – Vibhuti Patel joined on July 11, 2023, while Harsh Singh joined on October 19, 2023, adding at least three provisions to the 2013 Company Act.

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Anmol Singh Jaggi is Gensol’s managing director until Sebi cracked the whip on Tuesday.

Anmol Singh Jaggi’s current and former board directors have not received a reply.

“This decision was not made easily and I have considered it a big deal,” Jain wrote in his resignation letter last month. “There are a lot to be catered to in the company. Although the sponsor is very focused on business growth, it may be necessary for a mentor/advisor to provide the necessary guidance in such a fast-growing environment, Jain joined the Gensol Committee on May 8 last year. Jain is also the chairman of the Audit Committee and is also Anmol Singh and Popli and Popli and other members.

The director quit Gensol less than two months after the development of AGS Transact Technologies Ltd in February. Within days of the country’s second-largest teller machine, the second-largest manager, admitting that the cash crunch forced his default on bank loans and employee salaries, all four independent directors resigned quickly, citing “personal reasons.”

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According to Gensol disclosure, the company’s total debt ₹At the end of February 2025, 11.46 million ₹Rs 315 crore green, but the deal was canceled last month. Gensol also outlines plans to sell its business in the U.S. solar tracking subsidiary Scorpius Trackers ₹35 billion. Management said the transaction should be completed by the end of March 2026.

However, because Gensol purchased Scorpius ₹Last year, many analysts and investors expressed doubts that Gensol could complete the deal.

April to December 2024, 72.3% or ₹7.64 million, Gensol’s ₹10.56 million of revenue comes from the solar EPC business. The remaining 27.7% or ₹294 million, from electric car rental.

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