SEBI Heat Prompts BluSmart To Appoint Grant Thornton For Financial Review: Report

Electric cab operator BluSmart has appointed global audit firm Grant Thornton to conduct a forensic investigation into its financial operations, according to a report by Reuters. The move comes in response to a regulatory probe by the Securities and Exchange Board of India (SEBI), which recently barred co-founder Anmol Jaggi from accessing the securities market over alleged fund diversion.

Sources cited by Reuters revealed that the audit will scrutinise BluSmart’s financial standing, particularly focusing on the inflow and outflow of funds. One insider described the company’s cash situation as “concerning,” raising red flags about potential financial fraud. The decision to bring in a third-party audit firm reflects BluSmart’s attempt to restore credibility amid growing regulatory and investor scrutiny, states the report.

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BluSmart Infrastructure 

BluSmart, a rising rival to Uber and Ola in India’s electric mobility sector, operates a fleet of more than 8,000 electric cabs across Delhi, Mumbai, and Bengaluru. In 2023, the company held a 9 per cent market share in Delhi’s ride-hailing space and had built substantial EV charging infrastructure, it added.

The crisis stems from SEBI’s investigation into Gensol Engineering, a listed company also co-founded by Jaggi. Gensol, which leased EVs to BluSmart, reportedly received Rs 978 crore in loans from the Indian Renewable Energy Development Agency (IREDA) and Power Finance Corporation (PFC) to purchase 6,400 electric vehicles. However, only 4,704 EVs were acquired, with the remaining Rs 262 crore allegedly diverted for personal use. These misappropriated funds were reportedly spent on luxury real estate, high-end consumer goods, and family transfers.

The scandal has had a ripple effect. Several top executives have resigned from BluSmart, and the company has paused ride bookings, leaving many users stranded with unused app wallet balances. BluSmart has assured customers that services will resume, but no official statement has been issued.

Meanwhile, key investor BP Ventures, a subsidiary of British oil major BP, has yet to comment on the unfolding situation. The results of the forensic audit are expected to play a critical role in charting BluSmart’s path forward.

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