In a stunning development that’s sent shockwaves through India’s electric mobility sector, Power Finance Corporation Ltd (PFC), a state-run NBFC, has filed a complaint with the Economic Offences Wing (EoW) of the Delhi Police against Gensol Engineering Ltd. The charges? Allegedly forging documents to mislead credit rating agencies and secure favorable terms—jeopardizing trust in one of the government’s flagship EV financing initiatives.
Fraud Allegations Rock Clean Mobility Financier
On April 22, PFC released a statement confirming it had approached the EoW regarding the “issuance of falsified documents” by Gensol. The alleged fraud came to light when credit rating agencies CARE and ICRA began verifying letters submitted by Gensol, which claimed that the company was regular in repaying its debts. The lenders—PFC and the Indian Renewable Energy Development Agency (IREDA)—quickly denied issuing such statements.
The revelation has triggered a domino effect: Gensol and its ride-hailing EV arm, BluSmart Mobility, are now facing probes from SEBI, the Ministry of Corporate Affairs, and potentially the Enforcement Directorate for suspected fund diversion and money laundering.
Public Money, Private Missteps
The controversy strikes at the heart of India’s EV mission. In January 2023, PFC sanctioned a massive ₹633 crore loan to Gensol Engineering under the central government’s FAME and PM E-bus Seva schemes to accelerate electric vehicle adoption.
The loan breakdown:
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₹587 crore earmarked for procuring 5,000 electric four-wheelers to be leased to BluSmart Mobility.
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₹46 crore for 1,000 electric three-wheelers (this tranche was never utilized).
Out of the sanctioned amount, ₹352 crore was disbursed for leasing 3,000 EVs. PFC confirmed that 2,741 vehicles have been delivered and hypothecated, as verified by third-party agencies.
Where Did Things Go Wrong?
Until January 31, 2025, Gensol had a clean repayment record. But things spiraled in Q4 FY25, when the company failed to meet its obligations. PFC had to invoke the Debt Service Reserve Account (DSRA) to recover dues for February and March 2025.
To protect its interests, PFC has secured several safeguards:
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Pledged Gensol’s equity shares and NCDs.
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Corporate guarantees from Gensol Ventures Private Limited.
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Personal guarantees from the company’s promoters.
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Fixed deposits and other liquid assets under lien from BluSmart.
Still, the outstanding principal of ₹307 crore remains a looming liability.
A Wake-Up Call for the EV Ecosystem
This case is more than a corporate scandal—it’s a wake-up call for India’s booming clean mobility ecosystem. Gensol, once a poster child for EV progress with BluSmart’s electric fleet in major metros, now faces a credibility crisis. Investors have already reacted: Gensol’s shares have crashed 86% so far in 2025, including a 5% drop on April 22 alone.
What makes this situation particularly alarming is its ripple effect. Public sector funding through entities like PFC and IREDA is essential for India’s EV infrastructure. But such scandals may force lenders to tighten their scrutiny and adopt more conservative risk profiles—potentially slowing the momentum for sustainable transport.
Regulators Step In, But Is It Enough?
With SEBI’s interim order already in place, and more investigations pending, the regulatory net is tightening around Gensol’s promoters—Anmol Singh Jaggi and Puneet Singh Jaggi. While SEBI is probing fund diversion, the MCA is investigating corporate compliance, and the ED may join the fray soon.
Meanwhile, PFC is conducting an internal probe under its anti-fraud policy and has clarified it did not issue any letters to credit rating agencies, as claimed by Gensol.
Credits: Money Control
The Road Ahead
As the dust settles, one thing is clear: this incident will likely reshape how public funds are distributed in India’s EV sector. For startups riding the green wave, governance and transparency will now be under sharper focus than ever before.
With PFC’s reputation—and public funds—on the line, all eyes are on how swiftly justice is served and lessons are learned. The electric road ahead just got a little bumpier.
