BluSmart & Gensol Scandal: How They Got E & S Right, but G Went Wrong
- Admin
- May 2
- 2 min read
The recent BluSmart and Gensol scandal has rocked India’s startup ecosystem, drawing attention to what happens when companies get the "E" (Environmental) and "S" (Social) aspects of ESG right but fail miserably on "G" (Governance). Here's a breakdown of the scandal and why it’s a perfect example of how governance issues can unravel a promising green initiative.
The Scandal:
Gensol Engineering Ltd., a renewable energy firm, allegedly misused ₹977.75 crore in loans from IREDA and PFC, intended for leasing electric vehicles to BluSmart, an EV ride-hailing startup co-founded by Anmol and Puneet Singh Jaggi.
Investigations revealed that only 4,704 vehicles were purchased, with ₹262.13 crore unaccounted for.
Funds were allegedly diverted for personal expenses, including luxury real estate and golf equipment.
SEBI barred the Jaggi brothers from holding key positions in any company, and Gensol's stock plummeted nearly 90% in 2025.
BluSmart suspended operations and appointed Grant Thornton for a forensic audit.
The scandal has raised concerns about corporate governance and investor protection in India's startup ecosystem.
The Good: E & S
BluSmart, an electric vehicle (EV) ride-hailing startup, was built around a noble mission—reducing carbon emissions and providing cleaner, greener transportation in India’s congested cities. With the world moving toward sustainability, BluSmart’s use of electric vehicles was a step in the right direction. The company was tapping into the growing demand for eco-friendly alternatives, and this worked well for its Environmental (E) goals.
On the Social (S) front, BluSmart positioned itself as a socially responsible company, offering safe and reliable rides, while also ensuring decent working conditions for drivers. It aligned itself with the socially-conscious consumer base that cares about reducing pollution and improving public health.
The Bad: G (Governance)
While BluSmart’s environmental and social goals were commendable, the scandal exposed a significant failure in governance. Rather than using funds for the intended purpose, they were allegedly diverted for personal expenses, including luxury real estate and golf equipment. The founders, Anmol and Puneet Singh Jaggi, were barred from holding key company positions by SEBI, and Gensol’s stock value plummeted by 90%.
The Takeaway
While BluSmart and Gensol got the "E" and "S" parts of ESG right by promoting sustainability and social welfare, their failure in governance (the "G") completely undermined their credibility.
The reality is that there is no "greenium" (green premium) to exercise bad governance with good initiatives. The right sustainable business focuses on all 3 - E, S & G equally.
This scandal serves as a harsh reminder that good intentions and green initiatives can crumble without strong governance to back them up. Without proper accountability, transparency, and oversight, even the most promising green startups can end up losing their way.
Who suffered? The hard working employees, the loyal customer base and the investors backing commendable green and sustainability initiatives.
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