BluSmart Scam: EV Ride-Hailing Startup Faces SEBI Probe Over ₹978 Crore Loan Misuse - Grow-Own

BluSmart Scam: EV Ride-Hailing Startup Faces SEBI Probe Over ₹978 Crore Loan Misuse Blu smart

April 24, 2025

4 min Read

India’s electric vehicle (EV) ambitions have encountered a significant setback as BluSmart, a prominent EV ride-hailing startup, becomes embroiled in a financial scandal. The Securities and Exchange Board of India (SEBI) has initiated an investigation into allegations that BluSmart’s co-founders, Anmol Singh Jaggi and Puneet Singh Jaggi, misappropriated ₹978 crore in government loans intended for fleet expansion.

Allegations of Fund Diversion

SEBI’s interim order reveals that the Jaggi brothers diverted substantial portions of the loans, originally sanctioned for the procurement of 6,400 electric vehicles (EVs), towards personal luxuries. Only 4,704 EVs were reportedly purchased, with the remaining funds allegedly used to acquire a ₹50 crore luxury apartment in Gurgaon’s DLF Camellias and a $30,000 golf set . The funds were funneled through complex financial transactions involving their listed affiliate, Gensol Engineering Ltd., raising serious concerns about corporate governance and financial integrity.

Operational Fallout

In the wake of these revelations, BluSmart has suspended its ride-hailing services across major cities, including Delhi-NCR, Mumbai, and Bengaluru. Users have reported being unable to book rides, and the company has communicated that if services do not resume within 90 days, wallet balances will be refunded . The suspension has not only disrupted services for customers but also left thousands of drivers without work, highlighting the broader impact of the scandal on the gig economy.

Regulatory Actions and Company Response

SEBI has barred the Jaggi brothers from holding directorships in Gensol Engineering and from accessing the securities market. In response to the allegations, BluSmart has appointed audit firm Grant Thornton to conduct a forensic audit to trace the movement of funds and assess the company’s financial health . Gensol’s stock has plummeted nearly 90% this year, reflecting investor concerns over the company’s governance and financial practices.

Implications for India’s EV Sector

The BluSmart scandal underscores the challenges facing India’s EV sector, particularly regarding regulatory oversight and corporate governance. As the country strives to promote sustainable transportation solutions, ensuring transparency and accountability in the deployment of public funds becomes paramount. The incident serves as a cautionary tale for stakeholders in the EV ecosystem, emphasizing the need for stringent compliance and ethical business practices.

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