Gensol, BluSmart under Corporate Ministry watch, may launch probe on corporate governance violation: Report

The Ministry of Corporate Affairs (MCA) is looking to launch an investigation into Gensol Engineering and its related firm BluSmart for alleged involvement in any corporate governance violations, reported the news portal the Economic Times on Sunday, April 20. 

According to the report, the Corporate Ministry is examining the materials on the case available in the public domain as well as some information which they have received, before deciding on whether or not to open a formal investigation into the firms.

“Material available both in the public domain and certain information the ministry has received are being studied,” a senior government official told the news portal.

The sources said that MCA's decision is expected to be announced within a fortnight, as per the report.

MCA's Search

The Corporate Affairs Ministry is also conducting a preliminary assessment of issues related to corporate governance in firms. 

“Since the report indicates issues of corporate governance, once the preliminary assessment by the ministry of corporate affairs also indicates corporate governance issues, a call will be taken whether an inquiry or investigation should be initiated,” the official told the news portal.

The investigation also seeks to find any fund diversions related to the personal expenses of the promoters, such as the purchase of any luxury apartments, transfer to relatives, etc.

“The ministry will focus on ascertaining if there were any fund diversions for personal expenses of the promoters, such as the purchase of a luxury apartment, transfers to relatives and investments benefiting private entities owned by the promoters... That call is likely to be taken within a fortnight,” they said, as per the news report.

As per the reports, the Ministry has not issued any notices to either the companies or asked for any information from them, according to the report. 

The Gensol Saga

On April 15, 2025, the Securities and Exchange Board of India (Sebi), a securities market regulator, banned Gensol Engineering and its promoter, Anmol Singh Jaggi, from accessing the Indian stock markets until further notice in connection with a case involving fund diversion and governance lapses.

As per the media report, Sebi revealed that Gensol took out loans worth ₹9.78 billion from IREDA and PFC. A major chunk of which was used to fund the acquisition of electric vehicles (EVS) for its cab operations arm, BluSmart.

Even though Gensol denied defaulting on its debts, Sebi confirmed that the company has defaulted on its repayments, which led to rise of further concerns about the financial practices in the company and Gensol's association with BluSmart, according to Mint's earlier report.