Blusmart, India’s first fully electric cab service, had created a buzz by offering an eco-friendly ride option in major cities. It gained attention for being an all-EV fleet and was often seen as a green alternative to traditional ride-hailing platforms like Uber and Ola. But now, the company is in the spotlight for all the wrong reasons. A serious financial fraud has come to light involving the promoters of Blusmart, and this controversy might even lead to the shutdown of its services.
SEBI (Securities and Exchange Board of India) has uncovered a major scam where the promoters of Blusmart and its parent company, Gensol Engineering, are accused of diverting company funds meant for electric vehicle purchases into personal luxury expenses. The names involved are Anmol Singh Jaggi and Puneet Singh Jaggi, both founders and directors of the company.
How the Trouble Started: EV Loan Gone Missing?
Between 2021 and 2024, Gensol Engineering (which funds and manages the EV operations of Blusmart) took a term loan of around ₹664 crore from government bodies like IREDA and PFC. This money was specifically given for the purchase of 6,400 electric vehicles to grow Blusmart’s fleet. On top of this, the company promised to add 20% of this cost as equity margin, making the total project cost about ₹830 crore.
However, things took a dark turn when SEBI began investigating the transactions. Out of the ₹664 crore, only ₹568 crore was used to buy 4,704 EVs from the supplier Go-Auto. That leaves a gap of over ₹262 crore — a massive amount that had no clear usage record.
Layered Transactions: Money Went Round in Circles
According to SEBI’s report, a clear pattern of money laundering emerged. The company Go-Auto, after receiving payments from Gensol for supplying EVs, sent large amounts of money to other entities controlled by the same promoters. One of the entities, Capabridge Ventures, transferred ₹42.94 crore to DLF, the real estate giant.
When DLF was questioned, it confirmed that the amount was used to purchase luxury apartments in its high-end project “The Camellias” in Gurugram. This means that instead of buying more EVs for Blusmart, the promoters used public and government-backed funds to buy personal properties.
More Shocking Details: Personal Expenses with Company Money
The investigation didn’t stop at just property deals. SEBI uncovered multiple personal expenses that were made using company funds. These include:
- ₹26 lakh spent on a premium golf set from Taylormade
- ₹3 lakh for tour booking on MakeMyTrip
- ₹1.86 crore for buying foreign currency
- ₹17.28 lakh paid to Titan for personal shopping
- ₹11.75 lakh sent again to DLF Homes
- ₹6.2 crore transferred to their mother, Jasminder Kaur
- ₹2.99 crore sent to Anmol Singh Jaggi’s wife, Mugdha Kaur
Even after all this, payments of ₹25.76 crore were made directly to Anmol Singh Jaggi and ₹13.55 crore to Puneet Singh Jaggi.
Fake Invoices and Loops to Hide the Trail
The investigation also revealed that Gensol sent Rs. 424.14 crore to another related company called Wellfray Solar Industries. Out of this, ₹382.84 crore was further diverted to other small companies and personal accounts. Many of these companies were either directly owned or controlled by the Jaggi brothers, or had their close relatives as directors.
In short, instead of investing in EV infrastructure as planned, the money was funneled through multiple channels and finally landed in personal accounts or was used for non-business expenses. These tactics show a clear case of fund misappropriation and accounting fraud.
What SEBI Said: Blusmart Was Treated Like a Piggy Bank
In its official remarks, SEBI said that Gensol Engineering was handled like a personal family business rather than a listed public company. The promoters used company funds at their will, making it look like their own piggy bank. This type of behavior is not only unethical but also a major violation of financial and corporate regulations.
The seriousness of the situation lies in the fact that this fraud happened under a startup that received both public trust and institutional funding, including loans from government-linked bodies like IREDA and PFC. It raises concerns about due diligence, corporate governance, and transparency in the startup ecosystem.
Will Blusmart Shut Down?
With such massive financial irregularities out in the open, there is speculation that Blusmart’s operations might be impacted. There are even reports suggesting that the company may convert into a fleet partner for Uber, stepping away from its independent cab operations. While no official statement has been issued by Blusmart yet, the damage done to its image is serious.
This incident may also lead to tighter scrutiny of EV startups and government loan beneficiaries in India. The misuse of green loans meant to support sustainable transport could hurt the progress of clean energy efforts in the country.
Startup Lessons: Where Did the System Fail?
This case also highlights a few critical gaps in India’s startup and funding ecosystem:
- Lack of Transparency: The company never disclosed how over ₹262 crore was being used.
- Weak Financial Oversight: Investors and lenders failed to track money flow effectively.
- Misuse of Public Loans: Government loans meant for EVs were used for personal property and luxuries.
- Delay in Detection: The scam had been going on for more than a year before SEBI intervened.
These failures point to the need for a more robust system of checks and balances, especially when public funds and startup ecosystems are involved.
