Gensol, BluSmart now under a third simultaneous investigation as ED probes for money laundering

BluSmart's collapse merited a scrutiny of wallets controlled by EV apps.

A suo motu inquiry has been initiated into the alleged malpractices at Gensol Electric, a subsidiary of Gensol Engineering, sources from the Ministry of Corporate Affairs (MCA) informed CNBC-TV18 on April 22, even as the Enforcement Directorate probes for money laundering by the company.

Market regulator Sebi had recently passed an interim order against Gensol Engineering and its promoters Anmol Singh Jaggi and Puneet Singh Jaggi over alleged fund diversion.

Along with two separate investigations by Sebi and the Ministry of Corporate Affairs, it is learnt that the Enforcement Directorate (ED) too will examine the likelihood of money laundering at Gensol Engineering and the electric mobility startup BluSmart.

Presently, the government agency is looking into suspected financial irregularities at the company and may soon seek more information from various stakeholders.

Gensol had acquired term loans worth Rs 978 crore from IREDA and PFC between 2021 and 2024, with Rs 664 crore borrowed to purchase 6,400 EVs set to be leased to BluSmart. Additionally, Gensol was set to provide an additional equity contribution of 20 percent, bringing the total expected deployment of approximately Rs 830 crore for the purchase of the EVs.

In an exchange filing shared in February 2025, the company said it procured only 4,704 EVs so far. Its EV supplier, Go-Auto, also confirmed that Gensol has bought 4,704 EVs for a total consideration of Rs 568 crore. Sebi noted that the differential amount of Rs 262.13 crore between total expected deployment of approximately Rs 830 crore and the actual EV consideration of Rs 568 crore still remain unaccounted for, although over a year has passed since the company availed the last tranche of the financing.

In January 2025, the company notified stock exchanges of receiving pre-orders for 30,000 electric vehicles at the Bharat Mobility Global Expo 2025. However, the order from Sebi clarified that these Memorandums of Understanding (MoUs) signed with nine entities for 29,000 units were not binding in nature. These MoUs lacked key commercial details such as pricing and delivery schedules.

On April 21, the ED attached shares in Gensol Engineering held by a shareholder allegedly involved in the Mahadev online betting app case. Gensol and BluSmart are now the focus of this multi-agency probe, raising jarring questions about the nature of governance among India's startups.

Shares of Gensol Engineering are down 5 percent on April 22, and lower by 86 percent so far in 2025.

.

On April 22, 2025, a story titled ‘Gensol, Blusmart now under a third simultaneous investigation as ED probes for money laundering’ was published on www.moneycontrol.com. Owing to an inadvertent human error, it briefly carried a photograph of Mr. Parminder Singh, a digital and media entrepreneur, which was promptly removed upon discovery. We clarify that Mr. Singh has no connection with Blusmart, Gensol, or the story’s content, and deeply regret any inconvenience caused to him.