In BluSmart, calls for resignation are no longer just directed at just the chairperson Anmol Singh Jaggi, but at the entire board. Most of the EV ride hailing business' angel investors and equity funds are asking for a complete board revamp as fears of a cash-burn position intensify, people aware of the matter told NDTV Profit.
The board — which comprises of Jaggi, bp Ventures representative Sophia Nadur, investor director Sunil Singhvi and independent directors Inderpreet Wadhwa and Rupa Devi Singh — has fallen out of favour with many of the investors as the company fails to find fresh capital for itself, the abovementioned people said.
At first, the demand was only for the resignation of Jaggi, with that being the prerequisite for any kind of deal to save the startup. But now, as the stalemate progresses, more investors are asking for an entirely new board to take over the company, one of the people said on the condition of anonymity.
Jaggi, Nadur and Wadhwa were part of the company's audit committee, and many investors raised questions about how they were unable to spot the Jaggis' fund diversion — which involved round-tripping of money meant for leasing vehicles to BluSmart — before the markets regulator took notice, another person added, asking to not be named.
A new board will still have to include a representative from bp Ventures, since it is the largest shareholder with 13% stake in the company.
NDTV Profit has reached out to BluSmart and co-founder Punit Goyal for comments on the story.
The board — which comprises of Jaggi, bp Ventures representative Sophia Nadur, investor director Sunil Singhvi and independent directors Inderpreet Wadhwa and Rupa Devi Singh — has fallen out of favour with many of the investors as the company fails to find fresh capital for itself, the abovementioned people said.
At first, the demand was only for the resignation of Jaggi, with that being the prerequisite for any kind of deal to save the startup. But now, as the stalemate progresses, more investors are asking for an entirely new board to take over the company, one of the people said on the condition of anonymity.
Jaggi, Nadur and Wadhwa were part of the company's audit committee, and many investors raised questions about how they were unable to spot the Jaggis' fund diversion — which involved round-tripping of money meant for leasing vehicles to BluSmart — before the markets regulator took notice, another person added, asking to not be named.
A new board will still have to include a representative from bp Ventures, since it is the largest shareholder with 13% stake in the company.
NDTV Profit has reached out to BluSmart and co-founder Punit Goyal for comments on the story.
Also Read: BluSmart Is Gensol. Gensol Is BluSmart
The Gensol Round-Trip
India's markets regulator issued an interim order against Gensol and the Jaggi brothers on April 15. The Securities and Exchange Board of India alleged that the brothers had moved money from company accounts to personal coffers, funding an extravagant lifestyle.
The order banned them from accessing the securities market, and halted Gensol's proposed stock split. SEBI also directed the appointment of a forensic auditor to review the company’s books.
The regulator outlined instances of document fabrication and large-scale diversion of term loans sanctioned for electric vehicle procurement.
BluSmart, co-founded by Jaggi, claims to be India's first and largest zero emission ride-hailing service. The app has over 30 lakh downloads and the platform has offered over 1.45 crore rides, according to the company website.
It was already in trouble by late March, when Refex Industries' green mobility unit withdrew a proposal to take over 2,997 electric vehicles worth Rs 315 crore from Gensol. These vehicles, in turn, were supposed to have been leased to BluSmart.
To be clear, BluSmart was never a subsidiary of Gensol, but only a related-party. After all, they shared co-founders. But in Gensol, BluSmart had an EV leasing partner which was a close ally.
This means that scepticism around BluSmart's future is likely to be exacerbated by Power Finance Corp.'s complaint against Gensol Engineering over falsified documents. PFC's complaint to the EOW marks the first executive-level action that Gensol faces even as regulatory actions shape up against the firm.
Also Read: GENtlemen, SOLve This Mess You've Created
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