Insider Revelations in BluSmart Scandal: CSR, Media & Co-Founder Silence

The unfolding BluSmart-Gensol scandal has gripped the Indian startup ecosystem, with new layers of revelations emerging each day. While SEBI’s interim order has already spotlighted massive fund diversions, bogus EV claims, and fictitious factories, fresh insider testimonies—shared by startup analyst and LinkedIn voice Jayant Mundhra—are now peeling back the curtain on just how deep the alleged misconduct runs.

In a series of posts and conversations over the past week, Mundhra chronicled his discussions with four former BluSmart employees, including one from the senior-most management tier. Their revelations paint a troubling picture—not just of financial impropriety, but of a toxic culture of silence, complicity, and manipulation spanning founders, senior leadership, investors, and even sections of the independent media.

“Everyone Knew. But the Founders Calmed It Down.”

According to Mundhra’s sources, awareness of the irregularities was widespread within BluSmart for at least six months before the scandal broke.

“There had been multiple internal protests, especially as concerns grew about how investor money was being routed,” Mundhra noted. “But the founders were skilled at calming the waters—managing perceptions and pacifying dissenters.”

This internal knowledge makes the silence of the non-Jaggi co-founders particularly questionable. While many VCs and ecosystem players are now rallying behind the remaining co-founders and painting the Jaggi brothers as the sole culprits, Mundhra raises pressing questions:

• How could they not know how cars were being financed?
• Why did they invest their own money into BluSmart in mid-2023, alongside the Jaggis?
• What was their relationship with Gensol shareholder Hari Shankar Tibrewala—a Dubai-based hawala trader reportedly influencing company decisions?
• Was the Dubai expansion just another piece of the puzzle, driven by interests beyond core business logic?

These are not rhetorical questions. They demand answers—not just from the promoters, but also from investors, independent directors, and regulators who seemingly failed to perform even basic due diligence.

CSR Funds Allegedly Diverted from Gensol

Among the most damning new claims, two senior ex-employees allege that Corporate Social Responsibility (CSR) funds from Gensol were siphoned into the personal accounts of the Jaggi brothers. Though yet to be formally investigated, this revelation significantly raises the stakes.

CSR funds—legally mandated to support community development—were allegedly diverted under the guise of social initiatives. If true, this points to a willful abuse of corporate governance norms. Regulatory authorities, particularly the Ministry of Corporate Affairs, must take urgent note.

Suspicious Links to a Government Official

Adding another layer to the saga is the alleged involvement of a Jaggi family member who is reportedly a government servant. All four insiders cited by Mundhra flagged “shady dealings” involving the official, though specifics remain scarce. While full details are unclear, insiders hinted that this connection may have been used to shield or facilitate questionable operations—raising the possibility of deeper institutional compromises and misuse of influence.

Media’s Complicity and the Myth of the Ethical PR Machine

Perhaps the most ironic—and damning—element of the scandal is how sections of the mainstream media attempted to shift blame onto financial influencers and retail hype. While social media voices like Soverenn’s Aditya Joshi undoubtedly played a role in inflating Gensol’s stock, traditional media cannot claim innocence.

“The red flags were out there—for anyone who cared to look,” Mundhra said. “But instead of probing deeper, the media handed out awards, hosted the Jaggis and their co-founders on podcasts, and legitimized the brand with panel invites and cover stories.”

In glorifying optics and ignoring red flags, the media didn’t just fail its duty—it helped incubate a culture where accountability was optional and scrutiny was superficial. This wasn’t journalism; it was brand management.

Time for a Reckoning

The SEBI order accuses Gensol promoters—Anmol Singh Jaggi and Simarpreet Singh—of siphoning off ₹262 crore of investor funds via fake electric vehicle (EV) purchases, fabricated invoices, and shell entities, while manipulating Gensol’s stock price and boosting public perception through paid media and influencer campaigns.

But the BluSmart scandal is no longer just about one company. It has become a case study in the perils of optics-led entrepreneurship, flawed governance, and the erosion of scrutiny in India’s fast-growing startup ecosystem. It also serves as a stark warning to the government, investors, and institutions that back such ventures—often without asking the hard questions.

What began as a poster child of India’s EV and climate ambitions has now devolved into a cautionary tale. And unless all stakeholders—founders, financiers, and facilitators—are held accountable, the dream of India’s startup revolution may well collapse under the weight of its own unchecked hype.