Gensol-BluSmart Fiasco: NFRA Probes Inconsistency Allegations After Sebi Referral

The National Financial Reporting Authority (NFRA) is probing allegations of fund diversion by the promoters of Gensol Engineering, following a referral from the Securities and Exchange Board of India (SEBI), Business Standard reported.

As per the report, the NFRA intervened after SEBI referred the matter to the auditing and accounting body for investigation.

The NFRA regulates audit firms for both listed and unlisted companies with a paid-up capital exceeding ₹500 crore or annual sales surpassing ₹1,000 crore. Additionally, the NFRA may investigate auditors for insurance companies, banks, and entities involved in power generation or supply, among others.

In an interim order dated April 15, India’s stock market regulator, SEBI, highlighted a significant decline in the promoters’ stake in Gensol Engineering. This was allegedly orchestrated through a network of false disclosures, sham transactions, and diverted funds, effectively resulting in a near-total promoter exit and leaving unsuspecting investors bearing the consequences. Anmol Singh Jaggi and Puneet Singh Jaggi have been barred by SEBI from trading securities or holding positions as directors or senior management personnel in Gensol Engineering.

ICAI Review BluSmart, Gensol Financials

The Institute of Chartered Accountants of India (ICAI) will review the financial statements and statutory audit reports of Gensol Engineering and its affiliate, BluSmart Mobility, for fiscal year 2023–24 (FY24), due to suspicions, ICAI president Charanjot Singh Nanda announced on Wednesday, the Economic Times reported.

This is the second instance within a month—following IndusInd Bank—where the ICAI’s Financial Reporting Review Board (FRRB) has proactively intervened to ensure auditor accountability.

If the FRRB determines 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.

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 followed 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.