An insolvency petition filed by Indian Renewable Energy Development Agency Ltd (Ireda) has been accepted by the National Company Law Tribunal (NCLT), leading to Gensol Engineering Ltd being admitted into insolvency proceedings. The NCLT bench appointed an interim resolution professional (IRP) to oversee the company's affairs.

The petition, filed under Section 7 of the Insolvency and Bankruptcy Code (IBC), highlighted Gensol's default on loans amounting to ₹510 crore. Ireda emphasized the urgent need for oversight, citing a 'headless' situation at Gensol after key leaders departed amid regulatory scrutiny.

Allegations of a breakdown in internal controls and corporate governance norms were also raised against Gensol, with claims that the company's promoters were treating it as their personal entity. The company's substantial order book, involving renewable EPC contracts from government and public sector entities, was pointed out by Ireda.

The IRP will now take charge of Gensol's management and establish a committee of creditors (CoC) to evaluate resolution proposals. Failure to approve a plan within 180–330 days could lead to the company facing liquidation.

Since the initial notice issued to Gensol on 25 April, multiple financial creditors have initiated insolvency proceedings against the company. The NCLT had also permitted the central government to freeze bank accounts and lockers of Gensol Engineering and its subsidiaries, following petitions from Ireda and Power Finance Corp (PFC) to recover dues.

Gensol's challenges escalated after an interim order by Sebi in April, accusing the promoters of misappropriating funds and defaulting on loans, particularly related to electric vehicles for BluSmart. The company was further charged with misleading investors about its EV capabilities. The Jaggi brothers resigned from the board in May after Sebi's directives.

With borrowings totaling ₹977.75 crore from Ireda and PFC, including funds earmarked for EV procurement, Gensol faced complaints of document falsification from the lenders, leading to legal and regulatory hurdles.