India’s BluSmart swept up in Gensol investigation alleging misuse of EV loans

Summary

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 once seen as an emerging Uber rival in the South Asian market, has also been swept 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 public-listed company and participating in the securities market while the agency investigates. The Jaggi brothers also co-founded BluSmart Mobility. 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 clarify.” “This is just an interim step, not a final decision, and I’m confident that once everything’s reviewed properly, our position will be clear. We’ve always believed in doing things responsibly, and that won’t change,” Jaggi said. In its interim order, the regulator accused the Jaggi brothers of redirecting substantial loan amounts for personal use, including buying luxury real estate on the outskirts of India’s capital. The regulator said Gensol Engineering availed term loans of 9.78 billion Indian rupees (around $114 million) from the state-owned Indian Renewable Energy Development Agency and Power Finance Corporation. Of that, 6.63 billion rupees were set for purchasing 6,400 EVs to lease to BluSmart. However, the company acquired 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, including purchase of high-end real estate; (ii) benefit to the private promoter entities/transfer of funds to promoters’ close relatives; etc.,” the regulator said. Gensol previously denied the alleged defaulting on debt p...