In a significant development for India’s startup ecosystem, the Enforcement Directorate (ED) reportedly detained Puneet Singh Jaggi, co-founder of BluSmart, from a Delhi hotel on April 25, 2025.
The detention is said to be linked to an ongoing investigation into alleged financial irregularities at Gensol Engineering Ltd., BluSmart’s parent company, which has been accused of orchestrating a ₹978 crore (appr. $115 million) scam.
According to local sources, the ED’s actions follow raids conducted at Gensol’s offices in Delhi, Gurugram, and Ahmedabad, signaling a deepening probe into the company’s operations.
BluSmart, launched in 2019 as India’s first all-electric ride-hailing service, gained popularity for its eco-friendly approach and reliable service, positioning itself as a rival to Uber and Ola.
Founded by brothers Anmol Singh Jaggi and Puneet Singh Jaggi, alongside Punit K. Goyal, the company is said to have attracted substantial investments, including from BP Ventures, and expanded across Delhi-NCR, Bengaluru, and Mumbai.
However, its rapid rise came to an abrupt halt earlier this month when it suspended operations in these cities, leaving thousands of drivers jobless and customers stranded.
The ED’s investigation stems from a report by the Securities and Exchange Board of India (SEBI), which issued an interim order on April 15, 2025, accusing the Jaggi brothers of misusing funds at Gensol Engineering.
SEBI alleged that ₹663.89 crore of a ₹977.75 crore loan, intended for purchasing 6,400 electric vehicles for BluSmart, was diverted to personal luxuries and related entities.
Notable expenditures included a ₹42.9 crore apartment in Gurugram’s DLF Camellias, ₹26 lakh on golf equipment, and spa sessions worth lakhs.
The regulator also claimed that Gensol forged loan letters from lenders like the Indian Renewable Energy Development Agency (IREDA) and Power Finance Corporation (PFC) to falsely demonstrate debt servicing, further eroding investor trust.
The fallout has been severe.
BluSmart’s seemingly abrupt suspension of services on April 16, 2025, followed a ₹30 crore default on non-convertible debentures, raising red flags about its financial health.
Over 10,000 driver-partners were reportedly asked to return their vehicles, leaving them without income or clarity.
Customers, meanwhile, have flooded social media with complaints about inaccessible services and unprocessed wallet refunds, prompting the Central Consumer Protection Authority (CCPA) to investigate.
The company’s leadership has also faced serious issues, with senior executives, including CEO Anirudh Arun, resigning this past month amid mounting operational challenges.
The ED has issued a look-out circular against both Jaggi brothers, with reports indicating that Anmol Singh Jaggi is currently in Dubai.
The agency is also reportedly tracing the brothers’ spouses in Pune for questioning, suggesting a broadening scope of the investigation.
Speculation about potential money laundering charges has increased, with the ED exploring whether diverted funds were funneled through shell companies or used to manipulate share prices.
This scandal could negatively impact India’s startup ecosystem, with industry figures like Aman Gupta of boAt warning that such incidents erode investor confidence.
As BluSmart’s future remains uncertain, with talks of a potential stake sale to firms like Eversource Capital, the incident underscores the critical need for transparency and governance in such ventures.