BluSmart Co-founder Puneet Jaggi Detained By ED Amid Gensol Probe

The Enforcement Directorate (ED) on Thursday detained BluSmart co-founder Puneet Jaggi from a hotel in Delhi, following searches in connection with a case involving Gensol Engineering Ltd, as reported by news agency PTI citing official sources.

The ED conducted raids at the company's offices in Delhi, Gurugram, and Ahmedabad under the provisions of the Foreign Exchange Management Act (FEMA).

Photo Credit: https://x.com/puneetjaggi

The agency is currently investigating the Jaggi brothers-Anmol Singh Jaggi and Puneet Singh Jaggi-promoters of Gensol, following a Securities and Exchange Board of India (SEBI) report that alleged financial irregularities, poor corporate governance, and diversion of company funds.

As of now, Gensol has not issued an official statement, PTI noted.

BluSmart Operations Suspended

BluSmart Mobility, the Jaggi brothers' other venture, operates electric taxis under the BluSmart brand in Delhi-NCR, Bengaluru, and Mumbai. However, services have been paused in light of the SEBI report.

SEBI has also barred the brothers from accessing the securities market until further notice.

Sources informed PTI that Puneet Jaggi was detained by ED officials at a Delhi hotel, while his brother Anmol Jaggi is believed to be in Dubai. Their spouses have been located in Pune, Maharashtra. ED teams also visited their residences at The Camellias, DLF Gurugram, and another location in Ahmedabad.

According to sources, the ED is likely to register a money laundering case against the Jaggi brothers once the Economic Offences Wing (EOW) of Delhi Police files an FIR, based on complaints lodged by the Indian Renewable Energy Development Agency (IREDA) and Power Finance Corporation (PFC).

Allegations Against Gensol Group

The ED's action is rooted in the SEBI order, which stated that Gensol Engineering secured loans from PFC and IREDA for the purchase of electric vehicles and for Engineering, Procurement, and Construction (EPC) projects.

However, sources claim that the borrowed funds were instead "diverted" by the company to acquire assets in the names of promoters, their family members, or various shell companies controlled by the group.

The agency has reportedly identified these assets and discovered that some of the diverted funds were also used to obtain foreign exchange.

It has come to light that Gensol established multiple overseas entities, including in Dubai and the United States.

Furthermore, the ED is examining allegations that Ajay Aggarwal of Go Auto Pvt Ltd, the authorised distributor for Tata electric vehicles, "aided" Gensol in diverting loan proceeds instead of supplying EVs as intended.

A central focus of the ED's probe is the SEBI report, which accused the promoters of treating the publicly-listed company as their personal fiefdom-misusing corporate funds to purchase a luxury apartment in The Camellias, DLF Gurugram, splurge on expensive golf equipment, pay off personal credit card dues, and transfer money to close family members.

SEBI's Key Observations

SEBI's findings indicate a consistent and concerning pattern of fund diversion by Gensol's promoters, highlighting deep-rooted governance failures within the firm.

The report outlined how term loans acquired from IREDA and PFC were misused by the promoters.

SEBI further noted that the promoters behaved as though the company were their private enterprise-routing money to related parties and making lavish expenditures, with little regard for shareholders' interests.

It warned that these misappropriated funds would eventually be written off from the company's accounts, causing substantial losses to investors.

Gensol Engineering, listed on both the BSE and NSE, provides solar consultancy services, EPC projects, and electric vehicle leasing, among other offerings.