DLF Camellias is perhaps India’s most prestigious address, and is home to some of the most expensive flats in the country, but at least some of these homes were bought from funds with very dubious antecedents.
SEBI has alleged that the promoters of BluSmart’s parent company, Gensol, used EV loans to partly pay for flats in DLF Camelias. SEBI has now barred the promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, from participating in the stock markets over issues of financial management and funds diversion.
“It can be noted from the above that funds availed by Gensol as loans for procuring EVs were, through layered transactions, partly utilised for buying a high-end apartment in The Camellias, DLF Gurgoan, in the name of a firm where the MD of Gensol and his brother are designated partners,” SEBI said in its report. SEBI shared a graphic of how Rs. 43 crore was sent to DLF Limited, which had been received as a part of a Rs. 200 crore loan from IREDA for buying electric vehicles.
SEBI had begun probing Gensol after complaints against the company over share price manipulation and default in loan repayments. In a strongly worded letter, SEBI said that there was complete breakdown of internal controls and corporate governance norms at Gensol.
Sebi said Gensol had raised Rs. 975 crore in loans from institutions like IREDA and PFC for buying electric vehicles. However, only a part of the money was actually used for that purpose. The probe showed that more than Rs 200 crore was routed through a car dealer and cycled back to promoter-linked entities. Some of it was used for unrelated personal expenses, including buying luxury real estate. In addition, Sebi has also found that Gensol submitted forged documents to credit rating agencies to falsely claim timely debt repayments.
“The company’s funds were routed to related parties and used for unconnected expenses, as if the company’s funds were promoters’ piggybank. The diversions would mean they need to be written off from the company’s books, ultimately resulting in losses to the investors,” SEBI said.
Apart from the investment in DLF Camelias, funds were also routed to the promoter’s family and other investments. SEBI said that Rs. 6 crore was given to the promoter’s mother and nearly Rs. 3 crore to his wife. Another Rs. 26 lakh was spent on the purchase of golf clubs. Additionally, Rs. 50 lakh was invested in former Shark Tank judge Ashneer Grover’s new company 3rd Unicorn. Incidentally, Ashneer Grover had been fired from his company BharatPe for misappropriation of funds.
Gensol has seen its stock crash by over 80 percent in the last few months after the company had defaulted on its loan payments.