Mumbai and Bengaluru: Gensol Engineering Ltd founder and managing director Anmol Singh Jaggi intends to contest the regulatory order barring him from directorships and participating in the stock market, even as plans to take his companies Matrix Gas and Renewables Ltd and Blu-Smart public come unstuck.
On Wednesday evening, the embattled entrepreneur told investors in Matrix Gas that the Securities and Exchange Board of India (Sebi) order was “one-sided”, which he intends to contest, an investor who attended the meeting said. Jaggi has also put on hold taking Matrix Gas public later this year, while Blu-Smart, which planned to go public in the second half of next year, faces an uncertain road.
The meeting was called by investors who had put ₹155 crore in Matrix Gas in a round ahead of the planned initial public offering (IPO). In July 2023, the investors paid a premium of ₹122 for a share of ₹10 face value. The same month, the company filed its draft prospectus with the National Stock Exchange to list on its Emerge exchange meant for small and medium enterprises. With 5.6 million shares on offer, the IPO could have been worth at least ₹750 crore.
Matrix Gas did not respond to questions.
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On Tuesday, Sebi accused the Gensol founder of securities fraud and forgery. The market regulator barred Anmol and his brother Puneet Singh Jaggi from holding any executive or board position at Gensol or trading in securities until further orders.
According to the investor quoted earlier, Anmol Jaggi said in the meeting that the Matrix Gas IPO, for which draft documents were already filed with the NSE in July 2023, will not happen now. That is because Sebi has barred Jaggi from buying, selling or dealing with securities, either directly or indirectly.
“Technically speaking, since Sebi has barred the promoter and not the company from dealing in securities, Matrix Gas IPO can go through if there is no offer for sale from the promoters,” said senior securities lawyer Chirag Shah. “However, given the shadow of the regulator’s order, it is highly unlikely to go through now.”
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Further, Jaggi is said to have stressed that Matrix Gas has adequate reserves and currently needs no additional funding. He also said the company is debt-free.
“One of the main concerns was if the reserves in the company were intact, but that question never got discussed. We were muted during the meeting and could ask questions only through the chat box and hence couldn’t clarify our concerns,” the investor said on the condition of anonymity.
Separately on Wednesday, Blu-Smart riders have complained about missing cabs in Bengaluru, Delhi, and Mumbai. A Blu-Smart spokesperson declined to comment on the issues plaguing the company.
According to an investor deck sent to prospective investors in October last year, Blu-Smart planned to go public in the second half of 2026. The company, which claimed to have 8,000 cars as of 31 September 2024, has raised $220 million in equity and debt from investors.
Also read | Gensol fast-charged Blu-Smart. But their ties are a governance puzzle
The privately held firm has yet to file its financials with the ministry of corporate affairs for FY24. According to its October 2024 presentation, it ended FY23 with 7,300 cars and an annual revenue rate of $60 million.
Beginning September 2024, Blu-Smart has been looking to raise $50 million ( ₹418 crore) at a pre-money valuation of $335 million.
Gensol gave ₹148.33 crore as loans to Blu-Smart and ₹231.85 crore to Matrix Gas in FY24, according to Gensol’s annual report. Three subsidiaries of Blu-Smart, including Blu-Smart Fleet Pvt. Ltd, received ₹138.87 crore, while Blu-Smart Mobility Pvt. Ltd and Blu-Smart Mobility Tech Pvt. Ltd received ₹9.19 crore and ₹0.27 crore, respectively.
“Trust of all stakeholders, including customers, vendors and employees, is broken and anyone who does a business transaction with Gensol now runs the risk of a reputational risk, especially after what Sebi concluded about the fraud carried out in Gensol,” said Shriram Subramanian, the managing director of proxy advisory firm InGovern.
(Ayaan Kartik in Delhi and Jas Bardia in Bengaluru contributed to the story)
And read | The curious case of Gensol promoters share pledge and cash in current accounts
Source:https://www.livemint.com/companies/news/gensol-anmol-jaggi-sebi-order-nse-securities-market-stock-fraud-blu-smart-matrix-gas-ipo-cabs-bengaluru-delhi-mumbai-11744815016524.html