S Ravi, former chairman of the Bombay Stock Exchange (BSE), expressed deep concern over the recent allegations surrounding BluSmart, stating that such incidents could damage investor trust and tarnish the broader perception of startups.
S Ravi (Sethurathnam Ravi), the former BSE chairman and founder of Ravi Rajan & Co, warned that these actions could shake investor confidence in new ventures and affect the credibility of even well-established startups.
Recently, market regulator Securities and Exchange Board of India (SEBI) flagged issues related to alleged fund diversion and document falsification involving Gensol Engineering Ltd, which had a direct impact on BluSmart, ultimately leading to the suspension of its services.
Anmol Singh Jaggi, along with his brother Puneet Singh Jaggi, are the co-founders of BluSmart and also served as directors at Gensol Engineering, an Ahmedabad-based solar engineering and services firm. Both have stepped down from their directorial roles following the SEBI notice.
“It is not good for two reasons. Firstly, when new investors and companies come in, existing investors might stop funding altogether. They’ll feel that startups are focused solely on personal gains and inflated valuations. That’s not a good thing at all,” Ravi said. “Secondly, BluSmart was a well-established brand. It’s not a small name—it was built with great effort. But they demolished it for personal gains. They might have made money in the short term, but this shortcut is not right,” he added.
The former BSE chairman also pointed out allegations of insider trading, mismanagement, and fund diversion. By definition, insider trading involves buying or selling a company’s stock using confidential, non-public information.
“There were two trigger points. First, concerns were raised regarding the pricing of shares—there were numerous complaints about insider trading. Second, a whistleblower came forward with complaints against the company. SEBI launched an investigation and issued an interim order. In that order, they found certain deficiencies, including fund diversion and misstatements,” he explained.
Looking ahead, Ravi emphasized that startups and their promoters must focus on transparent communication and honest disclosures to prevent such incidents. “The startup community must now start engaging with all lenders and stakeholders, and demonstrate that they are operating under a robust governance structure,” he said. Discussing the roles of independent directors and auditors, he stressed that promoters should provide accurate and complete information to enable better disclosures.
