Case 1: BluSmart, often hailed by riders as a dependable cab service, has suspended its India operations.
Case 2: Gensol Engineering promoters Anmol Singh Jaggi and Puneet Singh Jaggi have been barred by SEBI from holding any directorship or key management position in Gensol or any other listed company.
Wondering how these two topics are related to each other?
In simple words, the SEBI order on Jaggi brothers might be the final trigger of BluSmart suspending its operations in India till at least May 7.
Here is everything you need to know about BluSmart operation suspension and why Anmol Jaggi and Puneet Jaggi are related to it, explained in 5 points.
1. Gensol and BluSmart: What’s the connection?
BluSmart’s smooth journey on Indian roads came to a screeching halt on April 17 as riders saw they could not book a cab anymore. The all-electric fleet company, which was co-founded by Gensol Engineering director Anmol Singh Jaggi and suspended its services in cities like Delhi-NCR, Mumbai and Bengaluru, was impacted by a SEBI order barring the Jaggi brothers from holding any key management position in Gensol or other listed companies. BluSmart had been facing problems since March when Refex Industries’ green mobility backed out from a deal to purchase 2,997 electric vehicles worth ₹315 crore from Gensol, and the SEBI order came as a final blow to end the road for the ride-hailing company.
2. What did SEBI say?
The Securities and Exchange Board of India this week ordered a probe into Gensol Engineering after it found irregularities in funds meant to buy new cars. In a major clampdown, the regulator has barred the Jaggi brothers from holding any directorship or key management position in Gensol or any other listed company. Also, it prohibited Gensol and its promoters from accessing the securities market until further notice, citing fund diversion and serious governance lapses.
3. A loan, a promise not fulfilled
Gensol, a listed company that leases electric vehicles, took loans from government-backed lenders including IREDA and PFC worth ₹978 crore. The company took the loan to buy EVs – 6,400 of them. EVs were procured by the company and subsequently leased to BluSmart, a related party. However, in a response to SEBI in February, Gensol admitted that it had procured only 4,704 EVs till date, which was far less than 6,400 for which it had received funding. This was corroborated by Go-Auto Private Limited, the EV supplier, which confirmed delivering 4,704 units to the company for a total consideration of ₹567.73 crore.
4. What did Anmol Jaggi do with the money?
Now, the question is, what did Anmol Jaggi do with the remaining money? The SEBI investigation revealed that some of these funds were used for purposes entirely unrelated to the sanctioned loans. These included personal expenses of the promoters, such as the purchase of a luxury apartment, transfers to relatives, and investments benefiting private entities owned by the promoters.
5. Will you be able to use BluSmart anymore?
As of today, the BluSmart app is not allowing users to book their cabs till May 7. However, there is no confirmation if the services will start after that. “We’ve decided to temporarily close bookings on the BluSmart app. We truly appreciate your support. While we strive to be back soon, we will initiate a refund within 90 days if services do not resume before that,” the company said in an email to customers without giving any reasons. The company, as on January 9, had a fleet of over 8,500 electric vehicles and a charging network of 5,800 stations across 50 hubs in Delhi-NCR and Bengaluru, and was supported by 10,000-plus active driver partners.
