Death of the sustainability child: What does it teach us?

The year 2019 can be recalled for two events, the questions to be linked today to green activities in the Indian transport sector. 2019 was the year in which Blu Smart started. It was also the year in which the government introduced the national mission to transformative mobility and the storage of batteries.

Blusmart began in January 2019 with an exciting green mandate that was preparing to take over the duopol, which Uber-Ola firmly commanded three megazities of the top megacties in India. Here was a CAB service that used electric vehicles while customers had transparency and guarantee, especially because of their fixed price model. It attracted attention and grew to a taxi service with its own loyal customers who showed a preference for its pocket -friendly, reliable trips. At the height of his success, Blu Smart led almost 10,000 electric vehicles with around 6,300 charging points in the three cities of Delhi NCR, Bengaluru and Mumbai. Here was an emerging environmentally friendly startup, which with its urban commuters used as an attractive alternative that had not dirty the air they breathed. And it was not just the environmentally conscious commuters who flocked to work. The business model with its zero law firm policy, friendly drivers and clean vehicles filled the market gap.

At around the same time, the Indian government introduced the national mission for transformative mobility and battery storage. It contained two phases of faster introduction and production of (hybrid and) electric vehicles in India (fame). The fame in its first phase subsidized prices and incentives for electric vehicles and their infrastructure. Green companies could use a reduction in GST (5% to 12%), the exemption from the approval requirements and a reduction in costs in the second phase. Bring this mix, Delhi EV policy in 2020, with many other incentives such as cheap tariffs and pollution.
At first glance, this was a startup that was in the right place at the right time. And nobody could have predicted the headlines that have greeted us recently. Except that there were signs. In 2024 there was the introduction of the surge price. It also lurked in the shadows that whispered mismanagement and a lack of corporate management. These problems stood under the surface for years and culminated in a Sebi examination after significant failures to pay the company. The fairy tale was abruptly set with suspended services, the employees suddenly unemployed and the customers are not sure whether they will get the money back in their wallpaper option. The reasons were a lot. Genol Engineering, the company in which Blusmart had rented its taxis, had exposed to its own liquidation crisis, which had a strong impact on the operations of the former. The last nail in the coffin of public opinion, however, was the co-founders who distract funds for luxury real estate and other personal indulgences from a loan for the purchase of more vehicles for the fleet.

Blusmart's Abrupte Was Brought on by Alleged Violations of Sebi's Anti-Wife (prohibition of Fraudulent and unfair Trade Practices Relating to Securities Market) Regulations, 2003 and Potential Breaches of Corporate Governance Under the Companies, 2013. Investigations revealed that Previously Earmarked for Ev Fleet Expansion Were Diverted for Personal Use by the Co-Founders, Seemingly a Case of Criminal Misappropriation. In addition, the abrupt closure of the company has stranded the left partners such as Genol Engineering, triggered contractual disputes and deteriorated liquidity crisis. The examination of Sebi showed investors misleading disclosures and may violate compliance with environmentally friendly bonds if the company increased sustainable financing.

The Blusmart tragedy raises significant questions about the future of electric vehicles in India. A startup that was assumed as a figurehead by those who want to demonstrate the ease and livelihood of the Green Transport sector did the opposite instead. Blusmart's abuse of subsidies of Fame-II and Delhi's EV incentives asked questions about the monitoring of green financing, whereby this collapse was considered one that could cause a stricter DUE diligence for EV startups, looking for subsidies or green investments and thus slowing down sector growth. Startups that start with the same type of view have greater difficulties to attract investors. The EV system will invite reduced investor Trust in the future and will therefore hinder acceptance. The mismanagement and irresponsibility of the startup had to be taken for other caution that are geared to achieve a better future for the planet. High goals for the environment and the consumer-friendly guidelines mean little if the basic principles of corporate governance and financial management are set aside. It is time that the political framework for EVS not only focuses on infrastructure and subsidies, but also introduces checks to prevent advantages for the greed of companies and the tendency to misuse guidelines for short -sighted negligence. It is ripe that a special legal point is formed in order to monitor the use of subsidies and other SOPs that companies are offered in the area of ​​clean energy. Blusmart can then enter into case studies as a benchmark for how green company cannot be scaled – and the need for stronger audits, transparent governance and regular examination to prevent similar relationships. Talish Ray is a lawyer and managing director at TRS Law Offices. Tejaswini Singh contributed to this article as a researcher.