BluSmart, Gensol Financial Statements Under ICAI Review After SEBI Allegations

The Institute of Chartered Accountants of India (ICAI) will examine the FY24 financial statements and statutory audit reports of Gensol Engineering and its affiliate BluSmart Mobility following suspicions of inconsistencies, ICAI president Charanjot Singh Nanda announced on Wednesday, the Economic Times reported.

This marks the second instance, after IndusInd Bank, in which the Financial Reporting Review Board (FRRB) of the ICAI has proactively intervened within a month to ensure auditor accountability.

If the FRRB finds that the financial statements of the involved entities are not “true and fair,” the case may be referred to the ICAI’s disciplinary committee for further action against the auditors.

The FRRB has previously scrutinised the financial statements of several banks and organisations including Byju’s for accounting inaccuracies and non-compliance. The FRRB assesses adherence to reporting obligations under relevant statutes, accounting standards and auditing guidelines.

The Securities and Exchange Board of India (SEBI) issued an order last week revealing that the significant decline in the promoter’s stake was not a natural occurrence but was deliberately engineered through a series of false disclosures, sham transactions and diverted funds. This orchestrated scheme facilitated a near-complete exit by the promoters, leaving unsuspecting investors to bear the consequences.

The ICAI’s investigation into these two companies will be separate from the Ministry of Corporate Affairs’ (MCA’s) efforts to examine the Gensol matter. On Monday, the MCA stated that it is reviewing the interim order issued by the Securities and Exchange Board of India (SEBI) against Gensol Engineering and will take appropriate actions in accordance with the provisions of the Companies Act, 2013.

Gensol-BluSmart Fiasco

Previously, SEBI stated in an interim order on Tuesday that Anmol Singh Jaggi, promoter of Gensol Engineering and founder of BluSmart, diverted funds to purchase an apartment in The Camellias, DLF Gurgaon.

The market regulator barred Gensol Engineering and its promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, from participating in the securities markets. The order was issued following a complaint filed in June 2024 alleging share price manipulation and fund diversion from Gensol Engineering. SEBI also halted the company’s share split, citing fund misappropriation and stock price manipulation.