Gensol Engineering Faces Investigation Over Misuse of EV Loans

India's Securities and Exchange Board (SEBI) has initiated an investigation into Gensol Engineering, a company embroiled in allegations of misusing electric vehicle (EV) loans. This probe also extends to BluSmart, a ride-hailing startup linked to Gensol, which was once considered a formidable competitor to Uber in South Asia. The investigation has led to the barring of Gensol's founders, Anmol Singh Jaggi and Puneet Singh Jaggi, from holding significant positions within the publicly listed company and participating in the securities market. The Jaggi brothers, who also co-founded BluSmart Mobility, are accused of redirecting substantial loan amounts for personal use, including purchasing luxury real estate.

Gensol Engineering had secured term loans amounting to 9.78 billion Indian rupees (approximately $114 million) from the Indian Renewable Energy Development Agency and Power Finance Corporation. These funds were intended for acquiring 6,400 EVs to lease to BluSmart. However, only 4,704 EVs were purchased for 5.68 billion rupees, with the remaining funds allegedly diverted for unrelated purposes. The regulator's interim order highlights the misuse of funds for personal expenses and benefits to private promoter entities.

BluSmart, which shares its co-founders with Gensol, is grappling with financial challenges, including cash burns and a lack of external capital. The startup recently ceased its operations in Dubai and is seeking ways to sustain its business in India, covering regions like Delhi-NCR, Bengaluru, and Mumbai. Despite its initial success and plans to expand its EV fleet, BluSmart has faced setbacks, including a failure to meet its target fleet size of 10,000 EVs by year-end.

The investigation into Gensol and BluSmart underscores the importance of robust corporate governance and financial accountability in the rapidly evolving EV sector. QuarkyByte offers insights and solutions that empower businesses to navigate these challenges effectively. Our platform provides actionable intelligence and strategic guidance to ensure compliance and foster innovation in the tech industry.