PFC has classified Gensol loan as fraud, made Rs 263-cr provision on losses: CMD

New Delhi: Power Finance Corporation (PFC) has classified the loan given to Gensol Engineering Ltd as fraud and has made a full provision on its Rs 263-crore outstanding from the crisis-struck company, said Chairperson and Managing Director (CMD) Parminder Chopra on Wednesday. She said that a preliminary enquiry, which is underway, has found irregularities in the delivery of electric vehicles (EVs) financed under the deal. “Based on the preliminary inquiry, we have considered it as fraud and provided for 100 percent because there are no overdues in the case of PFC,” Chopra said in a post earnings briefing with the media. The state-run company is expecting a full investigation report on the issue within a day or two.

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PFC disbursed around Rs 352 cr to Gensol

PFC had disbursed around Rs 352 crore to Gensol in three tranches to fund the purchase of 3,000 EVs. While the first two batches of 1,000 vehicles each were delivered, the final tranche saw delays. Only 741 vehicles were supplied, and approximately 259 remain undelivered despite payment having been made to the dealer, Go-Auto, Chopra said. “The advance has gone to the dealer, but the dealer has not supplied the cars. We have been following it up, but there has been a delay on the part of what verbally has been discussed... that the FAME scheme was discontinued and there were certain issues with respect to the pricing of the vehicles,” she added.

Chopra said that PFC has invoked bank guarantees and recovered Rs 44 crore, covering payments made for vehicles that were never delivered. Current outstanding dues from Gensol amount to Rs 263 crore, said the PFC CMD. The company has other securities, including personal guarantees and corporate guarantees, which will be invoked to recover more of the outstanding, she said.

The state-run non-banking financial company has been monitoring the TRA (Trust and Retention Account) very tightly to ensure that the payment goes for its intended purpose, she said, adding, “Payment going to the dealer for purchase of vehicles, I think beyond that we are also not able to track.”

Debt recovery

Indian Renewable Energy Development Agency (IREDA), the other state-run lender that has exposure to Gensol Engineering, has already dragged the troubled company to the National Company Law Tribunal (NCLT) and to the Debt Recovery Tribunal (DRT) on Wednesday. IREDA is trying to recover a combined loan amount of Rs 728.95 crore from Gensol Engineering and Gensol EV Lease Limited.

On being asked about exploring the DRT route, Chopra said, “If recovery through other means falls short, we may consider joining IBC. We’re also keeping the Debt Recovery Tribunal route open. Ultimately, we’re evaluating all available recovery mechanisms.”

SEBI findings

The comments come as SEBI reportedly found that in many instances, funds transferred to Go-Auto — ostensibly for EV purchases — were routed back to Gensol or to entities linked to the promoters, including Anmol Singh Jaggi. SEBI analysed bank statements of both Gensol and Go-Auto and raised concerns about possible round-tripping and misuse of public funds intended for EV fleet deployment.

(With inputs from agencies)

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