The Ministry of Corporate Affairs (MCA) has ordered a probe into Gensol Engineering as well as BluSmart for alleged violations of norms, news agency PTI reported on May 6 citing government officials.
Gensol's shares extended losses by another 5 percent to hit the lower circuit for the 18th consecutive session, down over 95 percent since its listing in 2023.
With this, Gensol is now under investigation by three entities, others being capital market watchdog Sebi and the Enforcement Directorate. The Institute of Chartered Accountants of India (ICAI) is also conducting a review of the financial statements of Gensol Engineering and BluSmart Mobility, which is likely to be completed in six months.
The news report quoted officials who said the ministry has ordered the investigation under Section 210 of the Companies Act, 2013. Under this Section, the Corporate Affairs Ministry can order a probe into a company on various grounds, including in public interest.
The shares of the company have been on a free fall since market regulator Sebi alleged Gensol Engineering promoters Anmol and Puneet Jaggi diverted loans meant for funding BluSmart's electric vehicle purchases for personal use. These included a luxury apartment in DLF's The Camellias in Gurugram, and high-end golf equipment worth Rs 26 lakh.
BluSmart was co-founded by Gensol Engineering promoters Anmol and Puneet in 2019.
Gensol took term loans worth Rs 978 crore from Ireda and PFC between 2021 and 2024, with Rs 664 crore taken for purchasing 6,400 EVs to be leased to BluSmart. Gensol was to provide an additional equity (margin) contribution of 20 percent, bringing the total expected deployment of approximately Rs 830 crore for the purchase of the EVs.
In an exchange filing released in February, the company said it had procured 4,704 EVs till then. Its EV supplier, Go-Auto, also confirmed that Gensol bought 4,704 EVs for Rs 568 crore.
The differential amount of Rs 262.13 crore and the actual consideration of Rs 568 crore still remain unaccounted for, SEBI said, though over a year has passed since the company availed the last tranche of the financing.
The market regulator debarred the brothers from holding any directorship post in the company and from accessing the market following which BluSmart suspended operations. "We've decided to temporarily close bookings on the BluSmart app," the firm said in an email to customers on April 17, without giving any reasons.
The stock of Gensol Engineering has fallen by a whopping 91 percent in 2025 so far.
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