The regulatory heat surrounding Gensol Engineering Ltd. continues to intensify as it faces growing scrutiny from the Enforcement Directorate (ED) for financial irregularities and alleged ties to the controversial electric mobility startup BluSmart. The company, once a high-profile player in the electric vehicle sector, is now embroiled in a series of investigations that could have significant repercussions on its future.

The ED is reportedly set to examine Gensol Engineering under the Prevention of Money Laundering Act (PMLA), with sources revealing that the agency is investigating possible financial misdeeds within the company’s operations. This is a critical development as the ED has already confiscated a stake in the company, allegedly linked to a shareholder involved in the Mahadev online betting app case.

MCA Launches Inquiry Into Gensol Electric’s Activities

In addition to the ED investigation, Gensol Engineering’s subsidiary, Gensol Electric, is also under scrutiny. Sources from the Ministry of Corporate Affairs (MCA) confirmed that the ministry had initiated a suo motu inquiry into the company’s financial and regulatory activities. The MCA is looking into Gensol Electric’s compliance with regulatory filings and its financial records to assess any irregularities. While no official timeline has been set for the inquiry, the ministry has emphasized that any punitive actions will be determined once the probe is concluded.

The Impact on BluSmart and its Ties to Gensol Engineering

The troubles surrounding Gensol Engineering are deeply tied to BluSmart, an electric cab service co-founded by Anmol Singh Jaggi, who was also the Managing Director of Gensol Engineering until recently. BluSmart, which was once seen as a promising green alternative to traditional ride-hailing services like Uber and Ola, is now facing a major crisis. The company, which operated an all-electric fleet, has suspended its ride-hailing operations in Delhi-NCR due to ongoing regulatory issues.

Customers of BluSmart have reported frozen wallet balances and a lack of communication from the company. The company’s app is currently non-functional, and the regulatory actions against Gensol Engineering have cast a shadow over BluSmart’s future. The electric mobility startup, which had raised millions in funding from prominent investors, including BP Ventures and ResponsAbility, was last valued at over $250 million in 2023. However, the regulatory hurdles it now faces have significantly damaged its reputation and raised doubts about its long-term viability.

Regulatory Action: SEBI Bars Anmol Singh Jaggi and His Brother

The Securities and Exchange Board of India (SEBI) has already taken action against Anmol Singh Jaggi and his brother, barring them from accessing the securities market due to allegations of misuse of investor funds. SEBI claims that funds raised by Gensol through a Qualified Institutional Placement (QIP) were allegedly diverted for personal use rather than being invested in acquiring electric vehicles, as originally intended. These funds were allegedly used to purchase luxury assets, including a luxury apartment, which directly violates the intended use of the capital raised.

This regulatory action has caused a cascade of negative consequences, with BluSmart’s operations severely impacted. The Delhi-NCR market, which was once a key focus for the electric mobility startup, has seen BluSmart suspend its services, leaving customers stranded and questioning the company’s future. With a growing list of unresolved issues, the fate of BluSmart now hangs in the balance.

Gensol Engineering’s Financial Woes and Share Price Plummet

As the regulatory storm continues to gather strength, Gensol Engineering’s share price has suffered a massive blow. The stock is currently locked in a 5% lower circuit at ₹105, continuing its downward spiral. Since its peak value of ₹1,147 in June of last year, Gensol Engineering’s stock has lost more than 90% of its value, reflecting investor concerns about the company’s future amid the ongoing investigations and regulatory scrutiny.

The situation has raised serious concerns among stakeholders and investors, who are now questioning the company’s ability to recover from these regulatory setbacks. Gensol Engineering, once viewed as a major player in the electric vehicle sector, is now at a crossroads, with its future uncertain in the face of mounting legal and financial challenges.

What’s Next for Gensol Engineering and BluSmart?

As the investigations continue, both Gensol Engineering and BluSmart are facing an uphill battle to restore their reputations and regain investor trust. The fate of Gensol Engineering’s financial health is in the hands of regulatory authorities, with both the ED and the MCA set to play pivotal roles in determining the company’s future.

For BluSmart, the immediate priority will be addressing its operational suspension and restoring its customer base in Delhi-NCR. The company will also need to manage its financial troubles and work towards resolving the ongoing regulatory challenges.

With these high-profile regulatory actions underway, the electric mobility sector in India is set to face heightened scrutiny. Companies like Gensol Engineering and BluSmart will need to navigate these turbulent times carefully if they hope to remain viable players in the increasingly competitive market.

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