Gensol Engineering, the parent company of BluSmart, has been accused of large-scale financial fraud, as detailed in a 20-page Securities and Exchange Board of India (SEBI) report. The company secured a ₹900 crore loan intended for the procurement of electric vehicles (EVs), but allegedly diverted ₹262 crore to purchase a luxury apartment in DLF Camellias.
While Gensol had committed to acquiring 6,400 EVs, it delivered only 4,704 vehicles worth Rs 567.73 crore. The remaining funds were reportedly funnelled through a former employee’s firm, Wellray Solar Industries, and routed to related parties, including significant personal transfers to the Jaggi brothers, who are at the centre of the scandal.
Many founders have reacted to the Gensol scandal, which has “dented trust in the startup ecosystem”. Aman Gupta, Sabeer Bhatia and Prabhkiran Singh took to their respective social media accounts to share lessons for India INC.
‘BluSmart dented trust’: Aman Gupta
Aman Gupta, co-founder and CMO of boAt, described the Gensol fraud as a “much-needed reality check” for the entire startup ecosystem – founders, investors, employees and customers alike. He added that the incident has dented trust in the ecosystem and listed key takeaways for the founders.
“The BluSmart situation is tough. Sad for everyone involved. But also a much-needed reality check for all of us in the ecosystem,” Gupta wrote on X (formerly Twitter), adding that he personally relates to “what it feels like”.
“Investors lost money, founders lost years of hard work, and employees lost stability, and customers lost a service they genuinely loved,” he said with a side note, hoping that the customers who had money in the BluSmart wallet may eventually recover their funds.
Gupta acknowledged the severity of the damage, noting that such incidents are a blow India cannot afford, but expressed that “the Indian startup system is resilient” and pointed out its ability to bounce back stronger.
He also went on to share some key takeaways for the founders from the Gensol. “Compliance and ethics aren’t boxes to tick. They’re the foundation,” adding that “clean books, timely audits, transparent reporting and all so-called ‘not so cool tasks’ make businesses sustainable”. This advice, he said, stemmed from his own experience as a Chartered Accountant (CA).
“Aur bachpan mein parents ne sikhaya tha – Jo bhi karo, dil se karo. Par Galat na karo. [Our parents always taught us—whatever you do, do it with heart, but never do wrong]; the same rule applies in business too,” he went on to say.
The 43-year-old stressed the importance of balancing “EQ, IQ & GQ (Governance Quotient)” and urged founders to champion for “real due diligence, not just in finance, but in culture, operations, and responsibility”.
He ended his long post with a powerful reminder: “To build not just fast, but right.”
The BluSmart situation is tough. Sad for everyone involved. But also a much-needed reality check for all of us in the ecosystem.
— Aman Gupta (@amangupta0303) April 17, 2025
I know what it feels like:
– Investors lost money
– Founders lost years of hard work
– Employees lost stability
– And customers lost a service they…
‘Don’t vilify all founders’: Sabeer Bhatia
Sabeer Bhatia, who co-founded Hotmail with Jack Smith in 1996, acknowledged the seriousness of the allegations against the electric ride-hailing company, BluSmart, but warned that a “media trial” does more harm than good, potentially undermining the entire startup ecosystem.
He added that “media must be prudent” and should not vilify all founders over one case.
“Allegations against BluSmart are serious – but trial by media, before facts are clear, hurts the whole startup ecosystem. Vilifying all founders over one case breeds fear, not innovation. Media must be prudent, not sensational,” Sabeer Bhatia wrote in a post on X.
Allegations against BluSmart are serious—but trial by media, before facts are clear, hurts the whole startup ecosystem. Vilifying all founders over one case breeds fear, not innovation. Media must be prudent, not sensational.
— Sabeer Bhatia (@sabeer) April 18, 2025
‘BluSmart scam proves India is progressing’: Prabhkiran Singh
Prabhkiran Singh, founder and CEO of Bewakoof, took a tongue-in-cheek view of the scandal, saying it ironically reflects India’s growth. The IIT alumnus quipped that earlier, scamsters would use misappropriated funds to buy homes in the UK—now they’re investing right here in India.
“BluSmart scam is proof that India is progressing. Pehle company loan ke paise se UK mei ghar lete the [Earlier, people would buy homes in the UK with company loans]. Now it’s DLF Camellias in Gurgaon. Scam toh wahi hai..bass ab India bhi premium ho gayaa [It’s the same scam, India has gone premium],” he wrote on LinkedIn.
“There are many ‘Gensol’ still hiding in the cupboard – waiting to tumble out with time,” Vijay Kedia, a seasoned investor and stock market expert, had said on X. He went on to list ten red flags.
“It’s wiser to be wary of companies that talk big and overpromise, maintain constant media presence, magnify even the smallest developments, raise funds frequently without clarity on deployment, diversify into unrelated businesses just to ride trending narratives and overuse diversify into unrelated businesses just to ride trending narratives,” he added.
He further said that one should also avoid companies that have “lavish promoter lifestyles that don’t match company performance, have high levels of promoter pledging, face frequent exits of key personnel and engage in excessive related-party transactions”.
