India’s Market regulator launched a probe tuesday into gensol engineering after Finding alleged Misuse of Electric Vehicle Loans. Blusmart, a ride-hailing startup connected to gensol that was on seen as an emerging uber rival in the south asian market, has also been also been snatch up into the investigation.
The Securities and Exchange Board of India (SEBI) Barred Gensol Engineering’s Founders, Anmol Singh Jaggi and Puneet Singh Jaggi, from Holding Key Positions in the PUBLICTED Company and Participating in the Securities Market While The Agency Investigations. The Jaggi Brothers also co-founded blusmart mobileity.
Anmol Singh Jaggi Told Techcrunch The Company was “Fully Cooperating” with the Indian Regulator and is “Putting TogeTher All the Necessary Documents and Facts to Clarife.”
“This is just an interim step, not a final decision, and i’m confident that once everything on reviewed properly, our position will be clear. We’ve allied in medicine bowing things Change, “Jaggi said.
In its interim order, the regulator accuses the Jaggi brothers of redirecting Substantial Loan Amounts for Personal Use, Including Buying Buying Luxury Real Estate on the outskirts of India ‘
The Regulator said gensol engineering available Term Loans of 9.78 Billion Indian Rupees (Around $ 114 Million) from the state-out Indian Renewable Energy Development Agency and Power Financy. Of that, 6.63 billion rupees were set for purchase 6,400 evs to lease to blusmart. However, the company account only 4,704 EVS for 5.68 Billion Rupees, The Regulator Noted In Its order (Pdf).
“Some of these funds were then used for purposes unrelated to the purpose/objective of the sanctioned term loans, which included (i) Personal expenses of the promoter, incidence of if the promoter Estate; (ii) Benefit to the Private Promoter of Funds to Promoters
Gensol previously denied the alleged defaulting on Debt Payments. However, the regulator has cited information from the lenders and said there was “Multiple Instructions of default” by the Gujarat-headquartered company.
“The promoters were running a listed public company as if it was a proprietary firm,” the regulator alleged in the order.
The Order Comes Over a month after credit-rating agencies downgraded gensol, Raising Concerns over the delays in the company’s debt servicing and corporate governancy.
Meanwhile, Blusmart, A Gensol Customer and the Entity Sharing Its Co-Founders, is Struggling Due to Mounting Cash Burns and a Lack of External Capital. The Startup Shut Down Its Service in Dubai, which was launched Last year, and is currently exploring ways to Sustain its business in India, which spans Delhi-NCR, Bengaluru, and Mumbai.
The Ride-Hilling Startup Planned to Pivot into a Fleet Partner for Its Arch-Rival Uber, The Indian Newspaper Economic Times Reported Earlier this week, Citing people Familiar with the developments.
Founded in Late 2018 as Gensol Mobility, Blusmart Started as an Uber Fleet Operator. However, the startup emerged as an all-ev rival to uber after starting its standalone operations before the covid-19 pandemic.
Blusmart Raised $ 25 Million In January 2024 to Boost Its Ev Charging Stations from Switzerland-Based Impact Fund Responsibility. Later that year, the company was reportedly in talks to Raise up to $ 100 MillionBut that Funding Never Materialized.
The Gurugram-Based Startup has raised more than $ 486 million in Total Funding, per Crunchbase. It counts bp ventures and mayfield India fund among its early investors.
Last Year, Blusmart Had a fleet of 6,000 evs, including 180 Z SUVS from Mg Motor and the Remining Batch Made Up of Tata Tigor Sedans. The Startup Planned to Increase Its Fleet Size to 10,000 EVS by Year-Ed, but it did not reach the target.
Jaggi Did Not Answer What Measures They are Taking Specifically for Blusmart.
Gensol Engineering’s Stock Tumbled More Than 83%, Last Trading at 129 Rupees Shortly Before The Market Closed on Tuesday.