Financial irregularities in Gensol Engineering and BluSmart Mobility—two companies previously celebrated for their commitment to green and sustainable business practices—raises questions about the true sustainability of green champions and brings under scrutiny the integrity of environmental, social and governance (ESG) initiatives. The two companies with common co-founders are grappling with allegations and a Securities and Exchange Board of India (Sebi) investigation.
BluSmart has raised around $278 million through 14 funding rounds from 259 investors as part of ESG, green or sustainable funds, shows a Forbes India analysis based on data provided by market intelligence firm Tracxn. Some of BluSmart’s marquee investors in ESG, green and sustainable space include Zurich-based impact asset management firm responsAbility Investments AG, Sumant Sinha (chairman and CEO, ReNew Energy) and BP Ventures (the corporate venture capital arm of British multinational oil and gas giant BP).
A little less than a year ago, in July 2024, BluSmart had raised $24 million (`200 crore) in a pre-Series B round to power its expansion plans. However, the company’s future appears bleak now as it has shut all its operations since April after Sebi’s interim order exposing the financial crisis in BluSmart.
Emails sent to both BluSmart and responsAbility Investments about the future of the company and related investments went unanswered at the time of going to press.
Amit Kumar Nag, partner, Aquilaw, believes the Gensol and BluSmart scandals expose a serious credibility crisis for ESG claims in the electric vehicle (EV) and solar engineering, procurement and construction (EPC) sectors.
These companies aggressively marketed themselves as green disruptors, leveraging the ESG label to gain investor trust and regulatory goodwill. However, Sebi’s revelations—ranging from fund diversion for luxury purchases to falsified no-objection certificates (NOCs) and misrepresented loan servicing—reveal a pattern of deceit masked by sustainability rhetoric.
“When companies claiming to champion green values are found guilty of financial misconduct, it undermines the authenticity of their ESG promises. It suggests that sustainability branding may be used as a smokescreen to distract from unethical practices. This erodes trust in other companies operating in the same space,” Nag explains.
Before shutting operations, BluSmart had claimed to be India’s and South Asia’s first and largest vertically integrated EV ride-hailing service and EV charging infrastructure network. Founded in 2019, it had been consistently stressing about its commitment to building a vertically integrated energy-infrastructure, mobility and technology business to “decarbonise mobility at scale”. It operated in Delhi-NCR, Mumbai and Bengaluru, and made its first international foray with a launch in the UAE in June 2024 as a premium all-electric limousine service.
Source: Forbes India
