Arun Menon’s Exit Highlights Governance Concerns Amid SEBI Crackdown
The ongoing corporate governance crisis at Gensol Engineering Limited (GEL) intensified with the resignation of its independent director, Arun Menon, following the Securities and Exchange Board of India’s (SEBI) interim order issued on April 15, 2025. Menon’s resignation email, addressed to promoter Anmol Singh Jaggi, unveiled deeper concerns related to undisclosed debt, opaque financial practices, and the cross-leveraging of group entities—particularly highlighting a shelved IPO plan for another group company, Matrix Gas and Renewables Ltd.
Menon claimed that despite repeated efforts since mid-2024 to obtain clarity on GEL’s debt structure and propose restructuring options to reduce interest burdens, his concerns were met with inaction. He further alleged failed attempts to coordinate meetings with the company’s CFO and said that no progress had been made despite internal discussions with company secretary Rajesh Parmar.
In his correspondence, Menon said he had previously expressed his desire to resign, citing his inability to contribute meaningfully to the board amid growing financial distress. However, he claimed he was asked to defer his resignation until Matrix’s planned IPO was completed—implying that leadership was prioritizing capital market moves over governance reforms.
Highlights
Arun Menon resigns from Gensol Engineering citing lack of transparency and governance lapses.
Claims repeated efforts to clarify company’s debt profile were ignored by the management.
Reveals he was asked to delay resignation until Matrix’s IPO, signaling a strategic delay for optics.
Resignation follows SEBI’s April 15 order targeting promoter-linked transactions and governance.
Matrix’s IPO Plans in Spotlight Amid Falling Valuations and Regulatory Heat
Menon’s revelation that Matrix Gas and Renewables Ltd. was gearing up for an IPO adds a new dimension to the Gensol saga, especially as SEBI’s order identified Matrix as a related party entity under the control of promoter Anmol Singh Jaggi. The attempted IPO now appears to have been part of a broader capital-raising strategy within the group, despite growing financial strains at GEL.
Matrix, which presents itself as a natural gas aggregator and green hydrogen infrastructure player, claimed strong growth in its investor presentations. With a reported top-line revenue of over ₹600 crore in FY24 and a healthy CAGR of ~30%, Matrix has positioned itself as a clean energy disruptor with no debt and significant production-linked incentives from the Ministry of New and Renewable Energy.
However, the Gensol-related revelations have severely dented investor confidence. Matrix’s unlisted share price has plummeted from ₹1,075 in July 2024 to approximately ₹425 now, slashing its implied market capitalization to ₹1,124 crore, according to data from UnlistedZone. This collapse reflects broader skepticism around group governance and credibility, particularly with the now-exposed interdependencies between Matrix and GEL.
Highlights
Matrix was preparing for IPO before fallout from Gensol’s financial disclosures.
Share price in unlisted market fell from ₹1,075 to ₹425, marking a ~60% erosion in value.
Matrix posted ₹600 crore+ in FY24 revenue and claimed zero-debt status.
SEBI confirmed Matrix as a related party to GEL, chaired by Anmol Singh Jaggi.
Cross-Leveraging Allegations and Related-Party Structures Raise Governance Red Flags
Menon’s resignation points to deeper systemic concerns over cross-leveraging of Gensol’s balance sheet to fund capital expenditures at Matrix and potentially other group entities. This practice, if confirmed, could indicate a misuse of listed company funds to support unlisted ventures—a scenario SEBI has historically cracked down upon for breaching minority shareholder rights and governance norms.
SEBI’s interim order has already identified a complex network of related-party transactions involving Matrix and Gensol, raising questions about the transparency of capital flows and the financial viability of both firms. The regulatory body is expected to deepen its scrutiny, particularly if investor protection principles are found to have been violated.
With Anmol Singh Jaggi occupying central roles in both firms—serving as Chairman and Managing Director at Matrix and as promoter at Gensol—the consolidation of power and decision-making authority without adequate board oversight could lead to further regulatory and legal ramifications for the group.
Highlights
Allegations of Gensol funds being used for Matrix capex intensify regulatory concerns.
SEBI interim order outlines related-party linkages between Matrix and Gensol.
Dual leadership by Anmol Singh Jaggi at both companies raises conflict-of-interest questions.
Governance concerns may delay or derail Matrix’s future capital market ambitions.
Investor Sentiment Weakens as SEBI Order Sparks Risk Contagion Across Group
Investor sentiment around both Gensol Engineering and Matrix Gas and Renewables has soured rapidly in the wake of regulatory scrutiny and executive resignations. The sharp drop in Matrix’s unlisted share price is being interpreted as a broader signal of collapsing market trust in the group’s financial integrity.
Arun Menon’s decision to make his resignation public and transparent is also seen as an unusual move for an independent director, signaling serious internal dissonance. This development is likely to have a chilling effect on investor appetite for green energy IPOs linked to the Gensol-Matrix ecosystem in the near future.
With Matrix previously showcasing robust financials and claiming a significant ₹1,000 crore+ order book, the drop in valuation and increased regulatory risk may force a complete rethink of its IPO strategy and funding roadmap.
Highlights
Matrix’s future IPO faces significant hurdles amid reputational fallout.
SEBI scrutiny may trigger internal investigations or further board-level exits.
Independent director’s public resignation adds credibility to governance concerns.
Regulatory risk now overshadowing fundamentals in investor decision-making.
