Our Bureau
New Delhi
Credited with revolutionizing the sphere of clean transport technology, the Indian ride sharing company BluSmart has hit a major financial road block after the Securities and Exchange Board of India (SEBI) released an interim order on April 15, pointing to financial wrongdoing by the promoters of Gensol Engineering, who were also among the co-founders of BluSmart.
The controversy surrounds brothers Anmol and Puneet Singh Jaggi, founders of BluSmart and promoters of Gensol Engineering Ltd. A detailed order by SEBI highlighted the financial irregularities committed by the Jaggi brothers, which wasn’t an accounting loophole.
The order said the promoters of Gensol, including Anmol and Puneet Singh Jaggi, had treated the company like their personal ‘piggy bank’. There were no proper financial controls in place, and the promoters had diverted loan money to themselves or related entities.
The loans, worth Rs 978 crore, were taken from government organisations like IREDA and PFC. These loans were supposed to be used for buying EVs. Instead, over Rs 200 crore was routed through a car dealership and sent to other companies linked to the promoters. Some of the money was used for luxury purchases, including flat in DLF Camellias worth Rs.50 crores. SEBI said these wrongdoings could lead to major financial losses for shareholders. Because of the fund misuse, even Gensol’s proposed stock split was put on hold.
Amidst the ongoing probe, the company has started shutting down its services leaving its users unable to book rides on the app. Many users across Delhi-NCR, Bengaluru, and Mumbai reported that they could no longer book rides through the BluSmart app. The company also sent a notification to users stating that bookings were being temporarily closed. It added that if services do not resume within 90 days, wallet balances will be refunded.
In the middle of this investigative furore, BluSmart sees a possible partnership with cab service operator Uber, which essentially shrinks the ride–hailing space in India. The San Francisco-based cab aggregator, according to reports, may use BluSmart cabs by rebranding them as Uber Green.
