BluSmart Crisis Deepens! Gensol Co-Promoter Puneet Singh Jaggi Detained After ED Raids at Delhi, Other Offices

BluSmart Crisis Deepens: The Enforcement Directorate detained Gensol Engineering Ltd co-promoter Puneet Singh Jaggi and conducted searches at the beleaguered company's premises in Delhi, Gurugram and Ahmedabad on Thursay, reported news agency PTI.

ED traits at Gensol Engineering offices were conducted at the company's premises under the provisions of the Foreign Exchange Management Act (FEMA). In addition to Puneet Singh Jaggi, his brother Puneet Singh Jaggi, is also under scanner after market watchdog Securities and Exchange Board of India (SEBI) flagged alleged misconduct by Gensol Engineering promoters and diversion of funds.

The sources told PTI that Puneet Jaggi was detained by the ED from a Delhi hotel while Anmol Jaggi is stated to be in Dubai.

ED action against Gensol Engineering is based on the SEBI order which claimed that its promoters took loan from Power Finance Corporation and IREDA for capital procurement of BluSmart EVs and EPC contracts.

According to SEBI investigation, Gensol the principal financial supporter and EV leasing ally of Blusmart, allegedly misused loans worth Rs 200 crore. It was revealed that the funds were released for the procurement of 6,400 EVs, however 4,704 were delivered.

The remaining funds were allegedly used for purchasing assets in personal name of promoters and their relatives, the fund was also diverted to various shell entities floated by the group.

BluSmart, Gensol Trouble

BluSmart is facing trouble because of its close link with Gensol Engineering, the company might soon be taken over by Eversource Capital, a climate-focused private equity (PE) firm.

BluSmart's problems started when its cofounders, Anmol Singh Jaggi and Puneet Singh Jaggi, were found to be involved in a scandal related to Gensol Engineering, another company they own. According to market regulator SEBI, the Jaggi brothers used Gensol's money wrongly and submitted fake documents to banks and investors.As a result, SEBI has banned the Jaggi brothers from being directors at Gensol and stopped them from taking part in India's securities market.

Due to these controversies, BluSmart suspended its cab services and sent emails to customers saying it would return their money if the services don't resume within 90 days.

BluSmart suspended its services in Delhi-NCR and Bengaluru nearly a week ago without prior notification to its customers. The announcement left the application operational but also rendered it unable to process bookings, select timings, or set travel dates.

Amid the ongoing trouble, Eversource is in talks to acquire BluSmart for Rs 800 crore to Rs 1,000 crore, which is significantly lower than its last known valuation of $300 million, reported CNBC TV 18.

Gensol Trouble: How BluSmart Is Connected?

BlueSmart was co-founded by Jaggi brothers and was launched as India's first zero-emission ride-hailing service. The ride-hailing service's mobile application was downloaded by more than 30 lakh users. According to an NDTV Profit's report, BluSmart was not a subsidiary of Gensol Engineering, but was a related party as both entities shared the same founders.

Despite the wisdespread claim made by BluSmart of its direct connection with Gensol, an INC42 report suggested that Jaggi brothers and their families have a significant influence on three of the subsidiaries that used to manage the BluSmart operations.