BluSmart Mobility's Financial Turmoil

The National Company Law Tribunal (NCLT) in Ahmedabad has officially admitted Catalyst Trusteeship’s petition against BluSmart Mobility, marking a significant downturn for the electric-cab operator due to unpaid dues amounting to approximately Rs 1.28 crore. This decision initiates the corporate insolvency resolution process (CIRP), with NPV Insolvency Professionals Private Ltd stepping in as the Interim Resolution Professional (IRP).

The Ripple Effect on Shareholders and Promoters

BluSmart's insolvency proceedings coincide with financial troubles at Gensol Engineering and its subsidiary, Gensol EV Lease, both of which are under insolvency for defaults totaling Rs 729.05 crore. The situation worsened following allegations of fund diversion by the Jaggi brothers, involving luxury flat purchases and stock price manipulation.

Legal and Financial Implications

The tribunal's ruling underscores the seriousness of the insolvency, imposing a moratorium on recovery proceedings and asset transfers. Akshit Goyal, partner at Goyel & Goyal, emphasized the decision's role in upholding the Insolvency and Bankruptcy Code's (IBC) integrity, highlighting insolvency as a last-resort remedy.

Customer Concerns and Wallet System Risks

BluSmart's prepaid payment instrument (PPI) wallet system poses unique challenges, as funds are not protected under RBI regulations. However, legal experts suggest customers might still see refunds, albeit with investors facing greater risks given the company's tangible assets.