The Ministry of Corporate Affairs (MCA) has initiated a formal investigation into the operations of Gensol Engineering Ltd and BluSmart Mobility, citing alleged breaches of the Companies Act, 2013. The move comes in the wake of regulatory actions and mounting concerns over financial irregularities and corporate governance failures.

According to a PTI report citing officials familiar with the development, confirmed on Tuesday that the probe was ordered last week under Section 210 of the Companies Act. This section empowers the ministry to investigate a company’s affairs when deemed necessary, particularly if public interest is at stake.

Gensol Engineering first drew scrutiny after the Securities and Exchange Board of India (SEBI) passed an interim order on April 15, barring its promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, from accessing the securities market. The SEBI order pointed to serious violations, including alleged diversion of loan funds for personal use, raising red flags around the company’s financial practices and governance structure.

Financial Reviews

BluSmart Mobility, a ride-hailing service also promoted by Anmol Singh Jaggi, has since come under the MCA’s lens, with investigators examining its financial records alongside Gensol’s.

In parallel, the Institute of Chartered Accountants of India (ICAI) has taken up a financial review of both companies. The Financial Reporting Review Board (FRRB) of ICAI is conducting an assessment of their financial statements for the fiscal year 2023–24. The review will focus on adherence to Accounting Standards, auditing norms, and the disclosure requirements under Schedules II and III of the Companies Act.

The FRRB is also evaluating compliance with RBI guidelines and various accounting guidance notes, with its findings expected within six months.

Additionally, Gensol Engineering is facing a separate investigation by the Enforcement Directorate (ED), further intensifying regulatory pressure on the company and its promoters.