Electric cab service BluSmart has appointed Grant Thornton for a forensic audit after a regulatory investigation found its co-founder allegedly diverted and misused funds which were meant to buy cars, two people with direct knowledge said.
A rival to Uber and India's Ola, BluSmart became hugely popular with its all-electric fleet of more than 8,000 taxis, setting up large-scale charging hubs in cities such as New Delhi, Mumbai and Bengaluru. In 2023, the company said it had a 9% market share in New Delhi.
BluSmart suspended services last week after market regulator Securities and Exchange Board of India (SEBI) barred its co-founder Anmol Jaggi from the securities market for the alleged diversion of funds from his listed affiliate company, Gensol, for personal gains, including to buy a $5 million luxury apartment and a $30,379 golf set.
Jaggi has not commented on the regulator's action.
Due to those findings, BluSmart's board has appointed Grant Thornton to conduct a forensic audit of the ride-hailing company, the sources said, declining to be named as the appointment is confidential.
The first source said Grant Thornton has been tasked with looking at the cash position of the company and reviewing movement of funds. The source added the cash position of BluSmart was worrisome.
Grant Thornton will have to find "where the funds are going. Whether there was fraud there," said the person.
BluSmart, which is backed by bp ventures, an arm of British oil major BP, did not respond to a Reuters request for comment.
Jaggi and Grant Thornton also did not respond.
BP's venture arm did not immediately respond to an emailed request for comment.
Gensol, where Jaggi is the managing director, used to procure electric vehicles and then lease them to BluSmart.
SEBI scrutinised loans of $78 million taken by Gensol and found funds were, through layered transactions, partly utilised for buying a high-end apartment in one of India's most expensive residential complexes near New Delhi.
The market regulator said there was a "complete breakdown of internal controls" and ordered a forensic audit at Gensol.
Gensol has said it will comply with the market regulator's directives. Its shares have lost nearly 90% this year.
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