Ashneer Grover’s Role in the BluSmart-Gensol Scandal: Investor or Victim?

As the BluSmart-Gensol scandal continues to reverberate across India’s startup landscape, sparking debates on accountability, investor scrutiny, and regulatory oversight, BharatPe co-founder and Shark Tank alum Ashneer Grover finds himself at the center of a very public controversy.

Media reports hinting at potential investor links to BluSmart’s alleged financial irregularities triggered an aggressive response from Grover. In a series of combative tweets, he labeled business journalists “anpadh” and “embarrassing,” calling the coverage “cheap journalism,” while insisting he is merely a victim of the fiasco.

“Dragging my and my company’s name into this Gensol/BluSmart fiasco is shameful… I’ve personally invested ₹1.5 crore in BluSmart and ₹0.25 crore in Matrix,” Grover posted on X.

He went further—offering to trade income tax returns and bank statements with editors—and mockingly proposed a masterclass on startup compliance, finances, and shareholder structures at Gurugram’s elite DLF Camellias.

This episode marks Grover’s return to the public spotlight after his tumultuous departure from BharatPe. In 2022, Grover faced allegations of financial mismanagement and fund misuse during his time as BharatPe’s co-founder. An internal audit revealed instances of inflated vendor payments, forged invoices, and the diversion of company funds for personal expenses, including luxury family trips abroad. The fallout led to Grover’s resignation and sparked legal disputes over his equity stake, tarnishing his reputation as one of India's most prominent startup figures.

I didn’t see any headline saying “funds diverted to Rajeev Singh’s DLF or Ratan Tata’s Titan”. Indian business journalists are the worst of the lot and basically anpadh @moneycontrolcom @EconomicTimes ! Kuchh bhi headlines bana do - views ke liye.

Indian journalism is really…

— Ashneer Grover (@Ashneer_Grover) April 17, 2025

From Hero to Headache

Grover’s furious rebuttal sharply contrasts with the halo BluSmart once enjoyed. The EV startup, with its sleek electric fleet and promises of transparency, was long celebrated by LinkedIn influencers, founders, and investors. But that image has rapidly crumbled under the weight of SEBI’s interim findings.

Posts that once praised BluSmart’s ₹500-crore revenue run rate and “world-class transparency” now appear painfully ironic—as the company faces allegations of financial opacity, phantom vehicles, and dubious pre-orders.

New disclosures from SEBI and NSE officials have punctured the startup’s narrative even further. A much-hyped EV factory in Pune’s Chakan—showcased by Gensol CEO Anmol Singh Jaggi—turned out to be inactive and leased, with no real manufacturing operations.

Meanwhile, the widely touted 30,000 pre-orders for Gensol’s upcoming reverse-auto EV? Merely “expressions of interest,” submitted without token advances, and well outside industry norms.

The Missing Millions

The BluSmart-Gensol scandal has revealed significant financial mismanagement, with SEBI's interim order exposing alleged siphoning of funds. Between 2021 and 2024, Gensol raised ₹977 crore from public institutions to procure electric vehicles, but only a fraction of the funds were used for their intended purpose. The remaining ₹262 crore was allegedly diverted for personal indulgences and unrelated ventures. These included ₹43 crore spent on a luxury flat at Gurugram’s The Camellias, ₹26 lakh on a high-end golf kit, ₹11 crore transferred to the promoters' relatives, and ₹1.86 crore used abroad. Additionally, funds flowed into entities like Third Unicorn and BatX Energies, raising questions about accountability and misuse of investor funds. SEBI stated that the company’s funds were misused as if they were the promoters’ personal piggy bank.

Investor Accountability Under the Microscope

Grover’s sharp pushback has ignited deeper questions within the startup community: How far does investor due diligence go when public institutions and regulatory blind spots are involved?

Grover insists he is merely a private investor with no operational role, tweeting:

“A private limited company is not liable for a shareholder’s actions.”

As of now, no evidence or allegations have surfaced linking Grover directly to the operational mismanagement or fund diversions revealed by SEBI's investigation. However, critics argue that prominent investors lend startups credibility—a factor that can significantly influence the decisions of other investors, public funders, and even regulators. When a startup faces adversity, it’s not just the founders under scrutiny, but the entire trust ecosystem surrounding them.

A Reckoning for Indian Startups

BluSmart’s future hangs in the balance—its app is non-functional, its public trust shattered, and its leadership under SEBI’s scanner. Key promoters have been barred from the securities market, and further action appears imminent.

But beyond the specifics of one company’s downfall, this scandal has become a litmus test for India’s startup ecosystem. It forces a reckoning with uncomfortable truths: the lack of investor diligence, gaps in institutional checks, and the risks of hype outweighing governance.

As the dust settles, India’s startup boom stands at a crossroads. Will this moment usher in deeper reforms and maturity—or will it be brushed aside as just another scandal?

One thing is certain: the BluSmart-Gensol story is far from over—and so is the scrutiny of those who backed it.