In a year already stacked with investor doubts and founder controversies, Gensol Engineering Ltd. has now taken center stage — for all the wrong reasons.
On April 15, 2025, SEBI (Securities and Exchange Board of India) dropped a bombshell: the promoters of Gensol, Anmol Singh Jaggi and Puneet Singh Jaggi, are accused of siphoning off hundreds of crores, misusing public funds meant to scale India’s EV ecosystem, and orchestrating one of the most elaborate startup scams in recent memory.
From “Green Tech Visionaries” to SEBI’s Watchlist
Gensol had positioned itself as a key player in India’s EV transition story. It raised a massive ₹977.75 crore in term loans from government-backed lenders IREDA and PFC, to procure 6,400 electric vehicles for its affiliated ride-hailing venture BluSmart.
But the numbers didn’t add up.
Only 4,704 EVs were ever actually purchased — worth just ₹567.73 crore. What happened to the remaining funds?
Where Did the Money Go?
According to SEBI’s detailed forensic analysis:
- ₹262.13 crore remains completely unaccounted for
- ₹207.27 crore was transferred to a vendor, Go-Auto, but never used for vehicle procurement
- A significant chunk was re-routed to Capbridge Ventures LLP, a firm linked directly to the Jaggi brothers
That’s not all.
₹50 crore of the misused funds was used to buy a luxury flat in DLF Camellias, Gurgaon, one of India’s most premium residential addresses.
Add to that golf kits, foreign trips, foreign currency purchases, luxury shopping, and credit card payments — and it paints a troubling picture of founders living lavishly on public money.
A Startup Built on Shell Companies and Fake Reports
But it wasn’t just about misusing funds.
SEBI also uncovered:
- Forged lender letters used to maintain credit ratings
- False debt servicing records submitted to CARE and ICRA
- Undisclosed defaults that violated SEBI’s disclosure norms
- Wellray Solar, another promoter-linked entity, received ₹424 crore, despite having no real operations
Wellray didn’t just receive the money. It allegedly funneled over ₹246 crore to other related entities and individuals — including direct personal transfers to the promoters.
Stock Price Manipulation at Scale
The scam went even deeper — into the capital markets.
SEBI found that Wellray Solar had been extensively trading in Gensol’s own shares, accounting for ₹338 crore in transactions, with 99% of its trades involving GEL stock.
The motive? Artificially inflate trading volumes. Create buzz. Sustain valuation.
SEBI’s Crackdown: A Turning Point
SEBI has taken strong and swift action:
- Anmol and Puneet Singh Jaggi have been removed from all director roles
- They’re barred from accessing the securities market
- All trading activities for them and Gensol are frozen
- A forensic auditor has been appointed for deeper investigation
- A proposed stock split has been halted
In its order, SEBI didn’t mince words:
“The Company’s funds were routed to related parties and used for unconnected expenses, as if the Company’s funds were promoters’ piggybank.”
What This Means for the Indian Startup Ecosystem
The Gensol scandal is more than just an isolated case of corporate fraud — it’s a wake-up call for the Indian startup ecosystem.
In the past few years, we’ve seen major trust-eroding moments:
- GoMechanic fudging books
- Byju’s under fire for governance lapses
- And now, Gensol — with state-backed funds misused for personal gain
At a time when impact-driven startups are gaining traction and public money is backing innovation, this incident underscores one uncomfortable truth:
Hype can raise funds. But only integrity builds lasting ventures.
Final Thoughts: What Founders Must Learn
- Funding is not personal capital — accountability is key
- Governance lapses can destroy even the most promising ventures
- Transparency isn’t optional — it’s the foundation of trust
2025’s biggest scam isn’t about a failed product. It’s about failed values.
And in a time when India is betting big on its startup ecosystem, we simply can’t afford that anymore.
Stay tuned to StartupbyDOC.com for more startup stories, breakdowns, and founder insights.
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