By Khushi Malhotra and Nandan Mandayam
(Reuters) -Indian electric cab firm BluSmart has entered insolvency, an order from a company law tribunal showed, amid mounting corporate governance issues after a regulatory probe alleged its co-founder diverted funds meant for vehicle leases.
BluSmart suspended operations in April after India’s market regulator barred co-founder Anmol Jaggi from the securities market.
The ban followed allegations that Jaggi diverted funds from his publicly listed affiliate, Gensol, for personal use — including the purchase of a $5 million luxury apartment and a golf set worth $30,379.
The National Company Law Tribunal admitted insolvency proceedings against BluSmart following a petition filed by financial creditor Catalyst Trusteeship on May 13, according to the tribunal’s order dated July 28.
The insolvency would take effect from the date of the order, marking the formal start of creditor claims, asset evaluation, and potential restructuring or liquidation under the insolvency and bankruptcy code.
The creditor, Catalyst, alleged that BluSmart defaulted on multiple payments totaling 12.8 million Indian rupees (around $147,400), saying it had received no response or repayment from the company, the order showed.
In response, BluSmart argued that the petition was premature.
On Monday, the NCLT appointed NPV Insolvency Professionals as the interim resolution professional to oversee proceedings.
BluSmart’s assets are mostly on lease, such as its cabs and charging stations, Ritesh Kumar Adatiya, director, NPV Insolvency Professionals told Reuters.
“The biggest assets as far as Blue Smart Mobility is concerned are the EV charging facilities across the country. Those readily available charging facilities may attract some investors,” Adatiya said.
However, recovering dues worth more than 10 billion rupees “seems unlikely at this point in time,” he said.
The interim resolution professional must submit a plan to revive the company in 180 days from the date of the order. It can also seek an additional 90 days to draft a plan.
($1 = 86.8160 Indian rupees)
(Reporting by Khushi Malhotra and Manvi Pant; Editing by Janane Venkatraman and Shailesh Kuber)
