India’s market regulator investigated the Gensol project on Tuesday after discovering alleged abuse of electric vehicle loans. Blusmart, a Gensol-related ride-hailing startup that was once regarded as a new Uber competitor in the South Asian market, has also been swept the investigation.
The Securities and Exchange Commission of India (SEBI) has banned Gensol Engineering founders Anmol Singh Jaggi and Puneet Singh Jaggi from taking key positions in public listed companies and participating in securities markets, while the institution investigates. The Jaggi brothers also co-founded Blusmart’s liquidity.
Anmol Singh Jaggi told TechCrunch that the company is “fully working” with Indian regulators and is “tidying up all necessary documents and facts to clarify”.
“It’s just a temporary step, not a final decision, and I believe our position will be clear once it’s properly scrutinized. We have always believed in doing things responsibly and that won’t change.”
In its interim order, regulators accused Jaggi Brothers of redirecting personal loans, including buying luxury real estate in the outskirts of the Indian capital.
Regulators say the Gensol project’s term loan received INR 9.78 billion (about US$114 million) from state-owned India’s Renewable Energy Development Authority and Electric Power Finance Corporation. Of these, 663 crore rupees were set to purchase 6,400 electric vehicles to rent the Blusmart. However, the company bought 4,704 electric vehicles for only Rs 568 crore. Order (PDF).
“Some of this funds are then used for purposes not related to the purpose/objective of the recognized term loan, which includes (i) the promoter’s personal expenses, including the purchase of high-end real estate; (ii) the interests to the private promoter entity/transfer of the funds to the promoter’s close relatives; etc.,” the regulator said.
Gensol previously denied the so-called debt repayment default. However, the regulator cited information from the lender and said Gujarat summed up the company’s “multiple instances of default”.
The regulator claimed in the order: “The promoter is operating a listed listed company.”
The order comes a month after the credit rating agency downgraded Gensol, raising concerns about delays in corporate debt services and corporate governance practices.
Meanwhile, Gensol client and shared co-founder entity Blusmart is in trouble due to cash burning and lack of external capital. The startup closed its services in Dubai, emission Last year, ways to maintain its business in India are currently being explored, which spans Delhi NCR, Bangalore and Mumbai.
The ride-hailing startup plans to spin its Arch-Rival Uber, The Indian Newspaper Economic Times, as a fleet partner Report Earlier this week, people familiar with development were cited.
Blusmart was founded in late 2018 as Gensol Mobility and was originally an Uber fleet operator. But the startup became a full-scale competitor to Uber after it started operating independently before the Covid-19 pandemic.
Blusmart Raised $25 million In January 2024, the responsibility from Switzerland increased its electric vehicle charging station. Later that year, the company was working with Raise up to $100 millionbut the funding has never been realized.
The Gurugram-based startup has raised more than $486 million in funding, Every crunchbase. It accounts for BP Ventures and Mayfield India funds among its early investors.
Last year, Blusmart had a fleet of 6,000 electric vehicles, including about 180 Z SUVs from MG Motor and the remaining batches consisted of Tata Tigor Sedans. The startup plans to increase its fleet size to 10,000 ev by the end of the year, but fails to meet its target.
Jaggi did not answer the measures they took specifically for Blusmart.
Gensol Engineering shares fell more than 83% and were last traded at Rs 129 shortly before Tuesday’s closure.
