BluSmart, India’s electric vehicle ride-hailing company, has successfully wound down operations following a Securities and Exchange Board of India (Sebi) order that led to the promoters’ financial misdeeds being exposed. Customers in Delhi-NCR, Bengaluru, and Mumbai reported that they could not book rides on the BluSmart app, and the company sent a notification informing that the bookings were being “temporarily closed.”
The turmoil stems from Sebi’s interim order issued on April 15, which revealed serious financial irregularities by the promoters of Gensol Engineering — Anmol Singh Jaggi and Puneet Singh Jaggi — who were also co-founders of BluSmart. The Jaggi brothers have now been barred from the securities market and stripped of any managerial or board roles at Gensol.
Sebi probe revealed a shocking abuse of corporate funds by the promoters, which included shopping for luxury items like a Rs 26 lakh golf set and an expensive flat in DLF Camellias, Gurgaon. The regulator termed the conduct as treating corporate funds as a “personal piggy bank,” indicating a total collapse of corporate governance.
BluSmart, itself financially struggling, witnessed investor trust take a dip after the exposes. A latest bid to mobilize Rs 415 crore ($50 million) also fell flat, further accelerating the company toward bankruptcy. Estimates indicate BluSmart had been pumping in more than Rs 20 crore every month to keep going.
As a response to user complaints, BluSmart also issued emails informing that if operations do not restart within 90 days, refunds for wallet amounts will be given. Airports like Delhi International also issued advisories to notify passengers of BluSmart’s halt and ensure the availability of alternative cabs.
There were prior reports indicating that BluSmart might migrate its fleet to Uber’s platform, signaling a possible exit from the ride-hailing business entirely.
Market experts believe this episode is a cautionary tale about the fragile state of governance in Indian startups. Tarun Singh, Managing Director of Highbrow Securities, said that early-stage startups tend to exist in a regulatory limbo, where fuzzy lines between individual and corporate expenses can have long-term repercussions.
Gensol has said it will cooperate completely with Sebi and will make records available for an open audit.
