Indian electric mobility firm BluSmart has entered insolvency proceedings following a tribunal order issued July 28, after a financial creditor alleged the startup defaulted on payments and regulators accused its co-founder of misappropriating funds intended for vehicle leases.
The National Company Law Tribunal (NCLT) formally admitted the insolvency petition filed by Catalyst Trusteeship, which claimed BluSmart failed to repay dues totaling 12.8 million rupees (about $147,400). The order marks the start of a formal resolution process, including asset assessment, creditor claims, and potential restructuring or liquidation under India’s Insolvency and Bankruptcy Code.
The development follows BluSmart’s suspension of operations in April, shortly after India’s market regulator barred co-founder Anmol Jaggi from accessing securities markets. The Securities and Exchange Board of India (SEBI) alleged that Jaggi diverted funds from his listed affiliate Gensol Engineering Ltd (GENO.NS), using them for personal purchases, including a $5 million luxury apartment and a $30,379 golf set.
BluSmart challenged the insolvency petition as premature, according to the tribunal filing. However, the NCLT proceeded to appoint NPV Insolvency Professionals as the interim resolution professional (IRP) to oversee the process.
“The biggest assets as far as BluSmart Mobility is concerned are the EV charging facilities across the country,” said Ritesh Kumar Adatiya, Director at NPV Insolvency Professionals. “Those readily available charging facilities may attract some investors.”
Despite this, Adatiya cautioned that the chances of recovering more than 10 billion rupees (approximately $118 million) in outstanding dues “seems unlikely at this point in time.”
Under the insolvency process, the IRP must submit a revival plan within 180 days of the order, with a possible extension of an additional 90 days if approved. Most of BluSmart’s assets, including its electric cabs and charging stations, are leased, raising questions about potential recovery value for creditors.
Source: Reuters