BluSmart Halts Services in Several Cities After SEBI Uncovers Fund Diversion

Ride-hailing service BluSmart has suspended its operations in multiple cities following serious allegations by the Securities and Exchange Board of India (SEBI). The regulator accused company promoters Anmol Singh Jaggi and Puneet Singh Jaggi of diverting funds meant for the purchase of electric vehicles (EVs) toward the acquisition of a luxury apartment in Gurugram.

What Triggered the Controversy?

The financial scandal broke out after SEBI issued an interim order on April 15, pointing fingers at the Jaggi brothers—who are also promoters of Gensol Engineering Ltd. (GEL). According to the regulator:

• The duo redirected loan funds meant for EV procurement.

• The funds were partially used to buy a luxury apartment in DLF’s The Camellias, a high-end residential project in Gurugram.

• Both promoters are now restrained from accessing the securities market until further notice.

Details of the Luxury Apartment Purchase

SEBI’s investigation revealed that the money intended for business expansion was diverted into real estate for personal gain.

The Gensol Engineering Link

Gensol, a company linked with the Jaggi brothers, reportedly borrowed substantial funds from public sector institutions to support BluSmart’s EV operations.

SEBI’s findings include:

• ₹978 crore was borrowed between 2021 and 2024 from entities like:

  • Indian Renewable Energy Development Agency (IREDA)

  • Power Finance Corporation (PFC)

• ₹664 crore was allocated for procuring 6,400 electric vehicles for BluSmart.

• However, Gensol disclosed in February 2025 that only 4,704 EVs were acquired.

• Vehicle supplier Go-Auto confirmed the cost of these vehicles was about ₹568 crore.

• This leaves a funding gap of ₹262 crore.

Additionally, a portion of the loan was transferred to a related firm, Capbridge, which then paid ₹42.94 crore to DLF for the apartment.

Financial and Operational Repercussions

These revelations have had immediate consequences, both for the companies involved and their stakeholders:

• Gensol Engineering’s share price fell by 5%, closing at ₹122.68 on the National Stock Exchange.

• BluSmart has paused services in several cities due to internal cash flow issues.

• Reports also indicate that the company is delaying salary payments for March.

BluSmart’s Internal Response

Anmol Singh Jaggi attempted to reassure employees through an internal email, acknowledging the delay in salary payments:

“Due to current cash flow constraints, there will be a short delay in processing salaries. However, we want to assure you that all dues will be cleared within April itself.”

Despite this message, concerns about BluSmart’s financial future remain high among employees and investors alike.

Frequently Asked Questions (FAQs)

1. Why did BluSmart suspend services in some cities?

BluSmart halted operations in several cities due to financial instability and ongoing investigations into fund misuse by its promoters.

2. How were the diverted funds used?

SEBI alleges that funds meant for electric vehicle procurement were partially diverted to purchase a luxury apartment worth ₹42.94 crore in Gurugram.

3. Who is affected by SEBI’s action?

The promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, have been barred from participating in the securities market until further notice.

4. Will BluSmart employees receive their delayed salaries?

According to an internal email, salary payments for March have been delayed but are expected to be cleared by the end of April 2025.

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