Gensol ki kahaani: A very electric startup scandal

Written by: Aarthi Ramnath, Raghav Bikhchandani & Yash Budhwar

Gensol ki kahaani: A very electric startup scandal

Another day, another scandal involving a struggling startup in India—this time it’s the poster boys of renewable energy—brothers Anmol and Puneet Singh Jaggi. They are accused of gross misuse of funds, misleading investors and securities fraud. The scandal has brought down a number of companies—including Gensol and BluSmart.

Meet the main characters: The Jaggi brothers are promoters and/or co-founders of a number of companies—including solar engineering firm Gensol, EV cab company BluSmart and natural gas supplier Matrix Gas. One is an IIT-Roorkee grad—while the other has a degree from the University of Petroleum and Energy Studies, Dehradun.

Gensol & BluSmart connection: The EV cab company was founded in 2019 by the Jaggi brothers and Punit Goyal. While Uber, Ola and Rapido rely on contract drivers and their vehicles, BluSmart operates its own fleet of EVs and directly employs its drivers. The BluSmart EVs are actually leased from Gensol Engineering—another company controlled by the Jaggi brothers.

Anatomy of a scandal: On April 15, SEBI barred the brothers from holding any executive or board positions in Gensol—and from trading in the securities market. It was the result of an investigation that began in June last year—when SEBI received a complaint of stock manipulation and funds diversion. The SEBI allegations were damning:

There was a complete breakdown of internal controls and corporate governance norms, it said. “The promoters were running a listed public company as if it were a proprietary firm. The company’s funds were routed to related parties and used for unconnected expenses, as if the company’s funds were promoters’ piggybank," Sebi stated. The diverted funds would ultimately have to be written off from the company’s books, resulting in losses to the investors.

Wtf did they do? Gensol raised Rs 664 crore ($77.5 million) in loans to fund 80% of the cost of 6,400 electric vehicles (EVs). The company would put in the other 20% in equity. And the EVs would be leased to the other Jaggi khandan company BluSmart. But the brothers only spent Rs 568 crore to buy 4,704 EVs. The baaki ka Rs 262 crore was diverted to finance their, umm, Gurugram lifestyle:

A luxury flat in Gurugram’s DLF Camellias for Rs 43 crore
A golf set from US maker TaylorMade for Rs 26 lakh, Titan watches and jewellery (Rs 17 lakh) and credit card bills (Rs 60 lakh).
Spa treatments worth Rs 10 lakh—think about that for a minute.
Transfers totalling Rs 11.3 crore to wives and mummy-ji.
Investments in Ashneer Grover’s startup ThirdUnicorn and a lithium-ion battery recycling startup, worth Rs 1.85 crore.

Irony alert: Grover was himself caught stealing from the cookie jar—as founder of BharatPe. In his case, Grover & family were accused of setting up dummy head-hunting firms—who filed fake invoices paid by the company. Thick as thieves, as they say!

Wait, there is more: When credit rating agencies asked for loan statements for review, the brothers forged “conduct letters” from two of its lenders. The reason: Gensol has been defaulting on its loans since December 31—a fact hidden from its investors.

Sebi scanned the bank statements of Gensol and Go-Auto, an auto dealer that sold 4,704 EVs to the company. The regulator found that as soon as money was transferred from Gensol to Go-Auto, it was either transferred back to Gensol or to entities that were directly or indirectly related to the brothers.

Why this matters: The forgery opens the door to criminal charges:

This is not just a securities fraud and goes beyond the Sebi order. The promoters forged documents on the letterhead of Ireda and PFC. If this happened in any other market, a case would be filed with the attorney general, and the management would have been immediately raided and arrested.

For now, SEBI has not brought in investigative bodies like the Economic Offences Wing or the Central Bureau of Investigation (CBI).

The fallout: BluSmart seems to be doomed—as is its rumoured partnership with Uber. The company seems to have suspended its services—without notice. Gensol’s share price has crashed to Rs 123.65—falling 89% from its 52-week high of Rs 1,125.75.

Also this: According to Morning Context, at least two companies—Wayo Logistics and luxury platform All Things Luxury—have hidden connections to Gensol—but are not listed as subsidiaries. They are also doomed:

A careful examination reveals a pattern. As Gensol rose from strength to strength throughout 2023-24, these peripheral companies were set up, where cash was allegedly taken out of Gensol to fund these ventures. But as Gensol now struggles with a fund shortage and mounting debt, these shadow entities are the first casualties.

Reading list: The best reporting in Morning Context and Mint is paywalled. Indian Express has the Jaggis’ lavish spending habits. Moneycontrol offers an overview of the scandal. Economic Times has the timeline on BluSmart’s woes.

UK Supreme Court says trans women don’t exist

The context: The UK Equality Act prohibits direct and indirect discrimination, and harassment and victimisation across nine categories:

age
gender reassignment
being married or in a civil partnership
being pregnant or on maternity leave
disability
race including colour, nationality, ethnic or national origin
religion or belief
sex
sexual orientation

Back in 2018, the Scottish government under then-first minister Nicola Sturgeon passed legislation to establish gender quotas for government boards. When this was amended to include transwomen, it sparked an immediate backlash. Leading the charge: For Women Scotland (FWS) campaign group—financially backed by author JK Rowling.

The FWS argument: The FWS filed a legal challenge—arguing that sex-based protections should only apply to people that are born female. The government was overstepping its powers by redefining the meaning of a “woman.” The group lost twice in Scottish courts before taking the case to the UK Supreme Court.

What happened now: Yesterday, all five judges of the UK Supreme court sided with FWS. The ruling said: “The unanimous decision of this court is that the terms woman and sex in the Equality Act 2010 refer to a biological woman and biological sex.” Any other interpretation is “incoherent and impracticable”. A person who legally changes their gender—by getting a Gender Recognition Certificate—is not included in the Equality Act’s definition of a ‘woman’.

Quote to note: The Court insisted that its ruling should not be interpreted as a win for the anti-trans activists:

"But we counsel against reading this judgement as a triumph of one or more groups in our society at the expense of another, it is not." He added that the legislation gives transgender people "protection, not only against discrimination through the protected characteristic of gender reassignment, but also against direct discrimination, indirect discrimination and harassment in substance in their acquired gender".

But, but, but: The ruling will have a sweeping effect for a number of protections afforded to trans women—that go way beyond board seats:

The ruling found the biological interpretation of sex was also required for single-sex spaces to "function coherently". It cited changing rooms, hostels, medical services and single-sex higher education institutions. The judges noted "similar confusion and impracticability" had arisen in relation to single-sex associations and charities, women's sport, public sector equality and the armed forces.

In other words, trans women will not be viewed as women in any of these contexts.

The big picture: Transgender people have borne the brunt of the ‘anti-woke’ backlash around the world. They were blamed for the loss of Kamala Harris and the Democrats in the US. That’s why even the Labour Party is not willing to stick its neck out for inclusion of trans women in what it calls “female-only spaces.”

Reading list: Financial Times (paywalled) and Politico have the best reporting on the context and the ruling. The Guardian looks at what the decision means for the transgender community. BBC News has the five main takeaways. TIME has a great critique on the scapegoating of trans kids. Al Jazeera offers a critique of where the ‘woke’ movement may have gone wrong.

Editor’s note: This may be a good time to point out that we define anything included in ‘good reads’ or a ‘reading list’ as material that is worth your attention—whether we or any of you agree with its views. Every link in splainer is not going to mirror everyone’s ideological views—and that’s a good thing, yes?

New threat to vulvas: Flesh-eating bacteria!

Let’s start with the basics: Necrotizing fasciitis (NF), more chillingly known as “flesh-eating disease,” is a rare but deadly bacterial infection. The bacteria enter through cuts, burns, insect bites, or surgical wounds—and once they get in, they move fast:

In necrotizing fasciitis, bacteria infiltrate the fascia, which is the connective tissue surrounding muscles, nerves, fat and blood vessels. The infection rapidly causes soft tissues to die, or "necrotize," and spreads through the body very quickly... [immunology expert Bill Sullivan] says "after these bacteria get into the skin, they release potent toxins that lead to rapid tissue destruction, liquefying muscle, nerves, and blood vessels."

People can die within 12 hours after symptoms begin.

The even worse news: Antibiotics alone cannot treat the disease—because it cuts off blood supply. Therefore, the patient often requires surgical removal of the infected tissue.

What happened now: One recent study suggests that cases of necrotizing fasciitis of the vulva may be on the rise—at least in the UK. Wait there’s more: A US study found that the rate of group A Streptococcus (GAS) infections—the most common cause of necrotizing fasciitis—has doubled between 2013 and 2022.

The big picture: Necrotising fasciitis remains a rare disease—but doctors hope to raise awareness with their research. The reason: The mortality rate for vulval NF is 50%. Livescience and Gizmodo have more details.

what caught our eye

business & tech

OpenAI might be cooking up its own social media platform—spurred by its viral image-gen tool, per CNBC.
Hermès has snapped up LVMH’s crown—becoming the world’s most valuable luxury stock after a sales stumble from the French giant.
Nvidia’s bracing for a $5.5 billion hit after the US slapped new export curbs on its AI chips bound for China.
Android phones will now auto-reboot if left locked for three days straight—part of a new security update from Google.
Meta CEO Mark Zuckerberg took the stand on Monday—as the FTC trial begins. For context into the case, read our story here.

sports & entertainment

Authorities have released a report revealing Gene Hackman’s wife, Betsy Arakawa, was googling flu symptoms and breathing techniques in the days leading up to her death.
Lebanon has banned Disney’s 'Snow White' over Gal Gadot’s role as the Evil Queen—citing her Israeli nationality amid ongoing Israeli strikes that have killed civilians in Lebanon.
Cate Blanchett says she’s ready to bow out—telling British press she’s “serious” about quitting acting to make space for other things in life (even if her family’s not buying it).
Harvey Weinstein’s retrial kicks off with jury selection, nearly a year after New York’s appeals court overturned his 2020 conviction.
The IPL had its first super over of the season, in which the Delhi Capitals edged out the Rajasthan Royals after both teams scored 188. Mitchell Starc’s barrage of yorkers was the star attraction.
His bowling action resembles Sunil Narine while his wicket celebration has a touch of Kesrick Williams—ESPNCricinfo profiles unconventional offspinner Digvesh Rathi, tracing his journey from club cricket obscurity in Delhi to a breakout season with the Lucknow Super Giants.

health & environment

Centre pulls the plug on 35 fixed-dose combination drugs after safety and efficacy red flags, with the drug regulatory body citing public health risks.
The Supreme Court has directed Telangana to protect the wildlife that will be affected by the destruction of 100 acres of forest cover in Hyderabad’s Kancha Gachibowli neighbourhood.

meanwhile, in the world

The Guardian has a must-read on the Mouride—a Senegalese sufi order—helping out teenage asylum seekers prepare for adulthood and navigate a challenging welfare system in Spain’s Canary Islands.
After a bout of diplomatic ping-pong, US-Iran nuclear talks are now set for Rome—despite Iran earlier insisting on Oman.
Speaking of Tehran, UN nuclear watchdog chief Rafael Grossi warned that Iran is edging dangerously close to building a bomb.
A US federal judge has threatened contempt proceedings against the Trump admin for secretly deporting Venezuelan migrants to El Salvador—despite a court order to stop.
The Trump administration is planning to offer stipends to undocumented immigrants who voluntarily agree to leave the country as part of its “self-deportation program.”
Speaking of Trump, he has the unlikeliest ally ever—PETA—thanks to his recent moves to phase out animal testing in federal research programs.
The White House barred Associated Press from Trump’s Oval Office press conference with El Salvador president Nayib Bukele—defying a court order. The reason: Associated Press refuses to call the Gulf of Mexico its new name, Gulf of America.
Desi-origin judge Indira Talwani has blocked the Donald’s bid to scrap the Biden-era Humanitarian Parole Program—which allows people from Cuba, Haiti, Nicaragua, and Venezuela to work in the US for two years.
The Pentagon has sacked the commander of the US military base in Greenland that the Vances visited last month. The reason: she sent an email distancing herself from the Veep’s remarks that the US should annex Greenland.
Another day, another crazy trade war update—this time, the White House’s claim that Chinese goods could now face a 245% tariff has caused confusion in Beijing.
Sticking with tariffs, California Governor Gavin Newsom has sued Trump, claiming that his home state is set to lose billions of dollars as a result.
Expressing ‘resolute solidarity’ with Palestine, the Maldives has banned Israeli tourists.
Al Jazeera has a good read on how Bangladesh’s renamed iconic New Year parade sparked outrage over what critics call yet another show of the Hasina government’s heavy hand.
Also from Al Jazeera: how porcupines—yes, porcupines—are tearing through Kashmir’s prized saffron fields, with deforestation pushing the spiky pests into farmers’ crops.
The EU has published a list of seven countries it considers “safe countries of origin” making it hard for citizens of these countries to claim asylum in the bloc. Yup, India and Bangladesh are on the list.

meanwhile, in India

For the first time since the pandemic, the number of Indian students heading to universities in the US, UK and Canada has declined year-on-year.
The next Chief Justice of India (CJI) is… BR Gavai. Hailing from Amaravati in Maharashtra, Justice Gavai will assume the role when the incumbent CJI Sanjiv Khanna retires in May.
Aligarh police arrested a Muslim restaurant owner for keeping napkins and tissue papers that had pictures of Hindu gods and goddesses and the slogan 'Bharat Mata Ki Aarti' printed on them.
The Indian government has slashed the Union budget for tribal scholarships by a considerable amount—from Rs 190 crore to just Rs 3 lakh.
For the first time ever, an Indian train—Mumbai-Manmad Panchavati Express—has an ATM machine on board. Don’t ask why.

Three things to see

One: Seventeen-year-old Nitin Gupta won the silver medal in the 5,000 metres race walk competition of the sixth Asian Under-18 Athletics Championship in Saudi Arabia. He missed the gold, literally by a second! What caught our eye: this Indian Express headline: ‘Indian athlete loses gold due to early celebration’—which is entirely mean and unnecessary. You can see the dramatic finish below.

Two: The movie adaptation of Stephen King‘s ‘The Life of Chuck’ will have Tom Hiddleston as the lead. The movie is slated for June 6. (Variety)

Three: We leave you with some lovely Christian art for the Easter weekend—and not of the Western kind. This painting is titled ‘The Resurrection’ by Korean artist Kim Ki-Chang. You can read more about him here.

This one's titled ‘La Résurrection’ and is by Congolese artist André Kamba Luesa. Btw, it is also our cover image. Reminder: Check out our lovely collection of Indian Christian-themed art in the Advisory. (Art and Theology)