BluSmart-Gensol Fiasco: ED Detains Puneet Singh Jaggi, Raids Gensol Offices Under FEMA

The Enforcement Directorate (ED) detained Gensol Engineering co-promoter and BluSmart co-founder Puneet Singh Jaggi from a Delhi hotel on Thursday and conducted searches at the company’s premises, according to a report citing officials.

The ED conducted searches at Gensol Engineering’s offices in Delhi, Gurugram, and Ahmedabad under the provisions of the Foreign Exchange Management Act (FEMA), PTI reported.

The promoter brothers of Gensol Engineering, Anmol Singh Jaggi and Puneet Singh Jaggi, are under federal investigation following a Securities and Exchange Board of India (SEBI) complaint accusing them of financial malfeasance, corporate misgovernance, and cash diversion.

The ED action is based on the SEBI order, which stated that Gensol Engineering received loans from Power Finance Corporation and Indian Renewable Energy Development Agency Ltd (IREDA) for the procurement of electric vehicles (EVs) and EPC contracts.

However, the SEBI investigation revealed that, instead of using these funds for their intended purposes, the company diverted them to purchase assets in the personal names of promoters or their relatives, or into numerous shell entities created by the group.

Grant Thornton Audit

A few days ago, BluSmart appointed Grant Thornton to conduct a forensic audit after a regulatory investigation revealed that its co-founder allegedly diverted and misappropriated funds intended for vehicle purchases, according to Reuters.

Grant Thornton has been tasked with examining BluSmart’s cash balance and fund transfers, a source said. The insider also expressed concerns about the company’s liquidity situation.

Grant Thornton is expected to investigate “where the funds are going” and determine “whether there was inconsistency there,” the report stated.

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.