BluSmart hits the brakes: Suspends bookings amid SEBI Probe

Gensol Engineering's promoters treated the listed company as a proprietary firm, diverting corporate funds to buy a high-end apartment in The Camellias, DLF Gurgaon, splurging on a luxury golf set, paying off credit cards, and transferring money to close relatives, Sebi revealed in its interim order.

At the core of Sebi's findings is an alarming pattern of fund diversion by Gensol's promoters -- Anmol Singh Jaggi and Puneet Singh Jaggi -- pointing to governance failures within the company.

At the heart of the controversy is the alleged misutilisation of term loans availed by Gensol Engineering Ltd (GEL) from IREDA and PFC.

According to Sebi, the company secured a total of Rs 977.75 crore in loans, of which Rs 663.89 crore was meant specifically for the purchase of 6,400 electric vehicles (EVs). EVs were procured by the company and subsequently leased to BluSmart, a related party.

However, in a response submitted to Sebi in February, Gensol admitted that it had procured only 4,704 EVs till date -- far less than 6,400 for which it had received funding. This was corroborated by Go-Auto Private Limited, the EV supplier, which confirmed delivering 4,704 units to the company for a total consideration of Rs 567.73 crore.

Given that Gensol was also required to provide an additional 20 per cent equity contribution, the total expected outlay for the EVs was around Rs 829.86 crore. By that calculation, Rs 262.13 crore remains unaccounted for.

To trace the end-use of the funds, Sebi analysed bank statements of both Gensol and Go-Auto. The regulator found that in many instances, funds transferred to Go-Auto ostensibly for EV purchases were routed back to Gensol or to entities linked to Anmol and Puneet either directly or indirectly.

Sebi's analysis revealed that some of these funds were used for purposes entirely unrelated to the sanctioned loans. These included personal expenses of the promoters, such as the purchase of a luxury apartment, transfers to relatives, and investments benefiting private entities owned by the promoters.

One of the revelations by Sebi was the use of Rs 42.94 crore, routed through Anmol Singh Jaggi's Capbridge Ventures, to finance a luxury apartment in DLF Camellias. Additionally, Rs 50 lakh was allegedly invested in Ashneer Grover's startup Third Unicorn, with other funds covering personal travel and leisure.

The financial trail continues with Rs 6.20 crore allegedly diverted to Anmol's mother, Jasminder Kaur, while his wife, Mugdha Kaur Jaggi, received Rs 2.98 crore. Further, extravagant personal spending included Rs 26 lakh on a golf set and Rs 3 lakh spent through MakeMyTrip for travel.

Further, analysis of the bank statements of Puneet prima facie also revealed that funds were transferred to other related parties, family members or utilised as personal expenses.