More trouble for Gensol Engineering as MCA orders investigation

Gensol Engineering’s regulatory troubles continue to escalate, with the Ministry of Corporate Affairs (MCA) having initiated investigation into the company and its group entities. The move follows a preliminary enquiry conducted by the ministry, which revealed grounds serious enough to warrant a deeper probe.

In an unusual and significant step, the MCA has bypassed inspection process and directly initiated an investigation under relevant provisions of the Companies Act. 

According to experts familiar with regulatory proceedings, such direct orders for investigation are relatively rare and indicate substantial concerns at the ministry level.

The MCA has instructed its investigation arm to complete the inquiry within a span of three months. A detailed report is expected to be submitted following the conclusion of the probe. This development raises serious questions about the corporate governance practices and financial conduct of Gensol Engineering and its affiliated companies.

This is not the only regulatory headwind the company is facing. The Securities and Exchange Board of India (SEBI) had passed an interim order against Gensol last month triggering attention from other enforcement agencies. Following SEBI’s action, the Enforcement Directorate (ED) also initiated its probe in FEMA (Foreign Exchange Management Act) possible violations of financial exchanges. 

MCA has not responded on Zee Business’s query. 

Industry analysts believe that the overlapping scrutiny from multiple regulators could have a significant impact on the company’s operations, investor sentiment, and market credibility.