The Securities and Exchange Board of India (SEBI) has recently turned its lens on the financial activities of Gensol Engineering Ltd and its promoter, Anmol Singh Jaggi, a development that is starting to raise eyebrows in the startup ecosystem.
One of the startups being probed is BluSmart, an electric mobility startup co-founded by Jaggi, which is now in the spotlight over allegations of misappropriation of funds.
In an interim order dated April 15, 2025, SEBI placed Jaggi's investment in Ashneer Grover's new company, Third Unicorn Pvt Ltd, within the context of a larger scheme of doubtful financial dealings by entities associated with Gensol. The order stated that Jaggi purchased 2,000 shares of Third Unicorn for Rs 50 lakh and continued to hold this stake as of March 31, 2024.
Grover's Link to BluSmart? When media reports surfaced, Grover posted on X (formerly Twitter) to assert that he had invested ₹1.5 crore in BluSmart and ₹25 lakh in Matrix, another firm linked to Jaggi.
Grover described himself as a "victim" of the situation, trying to disown the financial irregularities raised by SEBI. He hopes that the startup would be able to weather the current crisis for the benefit of its stakeholders. He also added that Third Unicorn Pvt Ltd does not have a duty to ascertain the source of funding from its investors since all investors make representations under the Share Subscription Agreement (SSA) and Shareholders' Agreement (SHA) for the purposes of ensuring the funds are legitimate.
"A private limited company is not liable for the actions of its shareholders or for probing the sources of funds they have," said Grover, highlighting that this is a normal practice in the global startup scene.
SEBI's Action In order to deal with the situation, SEBI has ordered a forensic audit of the books of Gensol and its connected entities. This will help expose the extent of financial mismanagement. Furthermore, SEBI suspended Gensol's proposed stock split, which was meant to draw more retail investors, until the investigation is over.
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