From SEBI Red Flag to IREDA Fraud Tag and CBI Case: How the Gensol-BluSmart Controversy Escalated
Key Takeaways
- •SEBI’s April 2025 interim order barred Anmol Singh Jaggi and Puneet Singh Jaggi from the securities market and from serving as directors or key managerial personnel in listed companies.
- •SEBI said Gensol and Gensol EV Lease took ₹978 crore in loans to buy 6,400 EVs, but only 4,704 vehicles were procured, leaving roughly ₹262 crore unaccounted for the stated purpose.
- •IREDA classified the loan accounts of Gensol Engineering and Gensol EV Lease, totaling ₹672.74 crore, as fraud and reported the action to the RBI.
- •The CBI has now registered a case tied to the ₹672.74 crore IREDA loans, shifting the matter into a criminal investigation.
- •BluSmart suspended app-based cab bookings in Delhi-NCR and Bengaluru, and the Jaggi brothers later resigned from the Gensol board.
Gensol Engineering's ₹672.74 crore financing case has escalated sharply — from the Securities and Exchange Board of India's (SEBI) findings on electric-vehicle (EV) loans and alleged fund diversion, to the Indian Renewable Energy Development Agency (IREDA) classifying loan accounts as fraud, and now a probe by the Central Bureau of Investigation (CBI).
Background: Gensol and BluSmart
Gensol Engineering is a listed Indian company engaged in solar engineering, procurement and construction (EPC) and EV leasing. BluSmart Mobility is an all-electric, app-based ride-hailing service that operated in Delhi-NCR and Bengaluru, and was one of India's prominent homegrown alternatives to Uber and Ola in the electric ride-hailing segment. The two ventures share common promoters — brothers Anmol Singh Jaggi and Puneet Singh Jaggi — with Gensol leasing EVs to BluSmart as a related party, a structure that tied the ride-hailing service's fleet to its promoter group's financing. Such promoter-group arrangements have drawn attention in a market where SEBI has tightened disclosure norms around related-party transactions involving listed companies.
What SEBI found
In an interim order in April 2025, SEBI barred the Jaggi brothers from the securities market and from holding directorships or key managerial positions in listed companies, citing prima facie findings of governance lapses and fund diversion. According to the regulator, Gensol and group entity Gensol EV Lease availed loans of ₹978 crore from IREDA and Power Finance Corporation (PFC) to purchase 6,400 EVs for leasing, but only 4,704 vehicles were actually procured, implying that the remainder — roughly ₹262 crore — was not used for the stated purpose. SEBI also flagged the use of a portion of the money for personal purposes, including the purchase of a residential apartment in Gurugram's DLF Camellias, and ordered a forensic audit of the company. As an interim order, the findings are prima facie and form part of ongoing regulatory proceedings.
The fallout
Within days of the SEBI order, BluSmart suspended app-based cab bookings in Delhi-NCR and Bengaluru, halting a service that commuters in those markets had used as an all-electric alternative to conventional cabs and aggregators. The Jaggi brothers subsequently resigned from the Gensol board. Separately, the Enforcement Directorate (ED) searched premises linked to the promoters under the Foreign Exchange Management Act (FEMA) as part of the widening scrutiny, adding a foreign-exchange dimension to the regulatory and, later, criminal proceedings.
IREDA's fraud tag
IREDA — a state-owned non-banking financial company focused on renewable energy financing — later informed exchanges that it had classified the loan accounts of Gensol Engineering and Gensol EV Lease — together amounting to ₹672.74 crore — as fraud and reported the classification to the Reserve Bank of India (RBI) under applicable norms. Under the RBI's framework for fraud risk management, accounts classified as fraud attract provisioning requirements for lenders, alongside reporting obligations to the central bank.
CBI enters
The controversy has now escalated further, with the CBI registering a case in connection with the ₹672.74 crore loans availed from IREDA — moving the matter from regulatory enforcement into criminal investigation. The case now runs on multiple parallel tracks: SEBI's forensic audit and further proceedings, the ED's FEMA probe, IREDA's fraud classification, and the CBI investigation, each of whose outcomes remains to be determined.
Source: CNBC-TV18
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