BluSmart files for insolvency amidst mounting corporate governance challenges: Report
The move comes almost three months after BluSmart halted cab bookings amidst SEBI issuing an interim order against Gensol Engineering.
Troubled EV ride-hailing company BluSmart has entered insolvency proceedings amidst mounting corporate governance troubles at the company, Reuters reported on Tuesday.
The development comes months after the Gurugram-headquartered company had halted cab bookings on its app and began transitioning its vehicles onto other platforms, YourStory had reported.
According to the Reuters report, the insolvency proceedings follow a regulatory probe that accused a company co-founder of misappropriating funds intended to purchase EVs.
BluSmart could not be reached immediately for a comment.
In April, a SEBI interim order was issued against Gensol Engineering—a company founded by Anmol Singh Jaggi and Puneet Singh Jaggi—who also co-founded BluSmart, along with Punit K Goyal.
Gensol, which leased out the majority of BluSmart’s electric vehicles, had taken out loans for the purpose of purchasing EVs for the cab-hailing platform’s fleet.
However, an investigation into these dealings found that the company had diverted funds to related parties and promoters, and a portion of it was used to buy luxury real estate, golf sets, and for other personal expenses.
The Jaggi brothers have since stepped away from Gensol and relinquished their positions within the company.
According to sources YourStory spoke to, top management executives, including BluSmart’s CEO Anirudh Arun, Chief Business Officer Tushar Garg, and Chief Technology Officer Rishabh Sood, left the company in March this year.
BluSmart eventually shut down its operations as a result of ongoing troubles within Gensol and a cash crunch triggered by an unsuccessful attempt to raise funds earlier this year.
According to an Economic Times report, the Ahmedabad bench of the National Company Law Tribunal (NCLT), in its ruling, directed NPV Insolvency Professions as the interim resolution professional and directed them to take charge of the company’s operations and assets while maintaining the firm as a “going concern”.
(The copy was updated with the latest details.)
Edited by Suman Singh