EV player Gensol flounders as promoters, directors resign after SEBI probe
SEBI accused Gensol promoters of treating the listed company as 'personal piggy bank'; after SEBI order, EV cab company BluSmart abruptly stops ride bookings
Gensol Engineering Ltd, a prominent player in India’s renewable energy and electric vehicle space, is grappling with a deepening corporate governance crisis after a series of high-profile resignations and regulatory actions.
The Securities and Exchange Board of India (SEBI) has barred the company’s promoters and ordered a forensic audit, following allegations of serious financial misconduct and fund diversion.
Meanwhile, much to the consternation of hundreds of users of the EV vehicles of BluSmart, the popular cab company, has started suspending its operations.
BluSmart stopped ride bookings after its co-founder Anmol Singh Jaggi and his brother Puneet Singh Jaggi, the promoters of Gensol Engineering, resigned following the SEBI ban for alleged misappropriation of funds in Gensol.
Complete breakdown
In the wake of the SEBI’s interim order, the founders of Gensol, Anmol Singh Jaggi and Puneet Singh Jaggi had resigned from their directorial roles and withdrew from the company’s management. The crisis intensified this week as three independent directors — Harsh Singh, Kuljit Singh Popli, and Arun Menon — tendered their resignations in quick succession.
Their departures come on the heels of the SEBI’s interim order, which cited a “complete breakdown” of corporate governance at Gensol.
The regulator accused the promoters of treating the listed company as a “personal piggy bank”, with funds allegedly diverted for luxury real estate, high-end golf equipment, and personal expenses.
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In a regulatory filing on Wednesday, Gensol Engineering confirmed that Arun Menon has resigned and also relinquished his committee roles. Menon’s resignation letter, addressed to founder Anmol Singh Jaggi, cited mounting concerns over the company’s financial strategy, including its growing reliance on debt to finance capital expenditures for other ventures.
He questioned the company’s ability to manage its substantial debt obligations and noted that previous attempts to restructure the debt had stalled. Menon also referenced constraints from his current employer, a private equity firm, which precluded him from continuing as an independent director.
Both Harsh Singh and Kuljit Singh Popli, in their exit letters, expressed distress over recent events and described their decisions as being made under “difficult circumstances”.
SEBI probe
SEBI’s probe was triggered by a June 2024 complaint alleging share price manipulation and fund diversion.
Also read: Front-running case: Sebi bans 9 entities, seizes Rs 21 crore illegal gains
The investigation found that Gensol had raised Rs 977.75 crore in loans from Indian Renewable Energy Development Agency (IREDA) and Power Finance Corporation (PFC), earmarked for the purchase of 6,400 EVs. However, only 4,704 vehicles were actually acquired, at a cost of Rs 567.73 crore, leaving more than Rs 200 crore unaccounted for.
The regulator’s interim order detailed how funds were funnelled through entities linked to the promoters, including Go-Auto and Capbridge Ventures, with significant sums used for personal luxury purchases. SEBI has instructed Gensol to fully cooperate with a forensic audit, which will scrutinise the company’s books and those of its affiliates.
The company has publicly stated its commitment to cooperate with the audit. Additionally, SEBI has directed Gensol to suspend a planned stock split.
Shares plunge
Meanwhile, the Gensol Engineering board has not issued a public statement beyond confirming the resignations and its intention to cooperate with SEBI’s directives.
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SEBI’s forensic audit is expected to provide greater clarity on the extent of fund misappropriation and the company’s financial health.
Gensol’s shares remain under pressure amid the ongoing investigation and leadership vacuum. Their shares have plunged 17 per cent over the past five trading sessions and hit a new 52-week low of Rs 116.54 on Thursday's close.
Birth and end of BluSmart
In 2018, Anmol Singh Jaggi teamed up with Punit Goyal to start BluSmart, an electric vehicle-only cab aggregator. It was first called Gensol Mobility Pvt and rebranded a year later as BluSmart.
BluSmart grew rapidly rivalling other ride-hailing apps and offering sustainable transportation and prompt service. In January, it had a fleet of over 8,500 electric vehicles and a charging network of 5,800 stations across 50 hubs in Delhi NCR and Bengaluru.
According to reports, as BluSmart abruptly shut down operations it may now become its rival Uber's fleet partner.