Gensol Faces Insolvency Proceedings as Ireda Moves NCLT

Following Gensol Engineering's default on a loan of INR 510 crore, the state-run financier Indian Renewable Energy Development Agency (Ireda) filed a petition against the business under Section 7 of the Insolvency and Bankruptcy Code, Ireda said in a stock exchange filing on 14 May.

 The value of stock interests is likely to be destroyed if the National Company Law Tribunal accepts the insolvency petition, and all of the company's creditors are anticipated to submit their claims to the court-appointed resolution professional for debt resolution.

Gensol is Navigating Through Troubled Waters

In addition to other regulatory enquiries, Gensol is being investigated by the Securities and Exchange Board of India (Sebi) for allegedly diverting funds from the listed company by its promoters. Anmol Singh Jaggi and his brother Puneet Singh Jaggi, the founders of Gensol Engineering and BluSmart Cabs, resigned from the Gensol board in response to the Sebi ruling, stating in a letter to the exchanges that their actions were in accordance with Sebi's directives.

 Puneet served as Gensol's full-time director, while Anmol served as managing director. Prior to this, Ireda started an internal examination on April 25 in accordance with its own due diligence procedures and Reserve Bank of India rules.

Ireda claimed that the promoters had violated the terms of the contract by diluting their shareholdings without the lenders' consent. As a result, on April 24, Ireda complained to the Economic Offences Wing about the aforementioned issues with Gensol.

RBI Probes E-Wallets After BluSmart Collapse

According to various media reports, India's central bank is investigating some digital wallets linked to electric vehicle companies after the abrupt demise of the nation's biggest all-EV taxi service prevented customers from accessing funds linked to their accounts.

The issues encountered by customers of the digital wallet of the app-based ride-hailing service BluSmart led to a review of the payment methods utilised in India's nascent EV ecosystem.

The incidents brought about by the company's alleged fraud exposed the absence of protections for customers who deposit funds into so-called closed-loop wallets in order to conduct transactions on apps, particularly those that deal with EVs like charging stations or ride-booking.

According to various published reports, the Reserve Bank of India has started informal conversations with operators of EV charging stations and other app-based EV platforms in order to evaluate potential consumer hazards.

 In India's rapidly expanding digital services ecosystem, so-called closed-loop wallets—app-based payment systems that are limited to use on a single platform—have become widely available. Since the central bank does not actively supervise these wallets like it does open-system wallets under its regulation, they are more susceptible to platform failure.

In April, BluSmart informed customers that it could take up to 90 days to reimburse money after thousands of users who had preloaded money into the wallet to book trips within the city and at the airport were unable to secure a refund or move the money to another location.