India green cab firm halts bookings after regulator scrutiny
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India's all-electric ride-hailing start-up BluSmart suddenly halted new bookings on Thursday after the market regulator found an affiliate company misused funds meant for purchasing green vehicles.
BluSmart, a niche rival to market giants Uber and and Ola, runs a fleet of more than 7,000 electric vehicles and a wide network of charging hubs in New Delhi, financial capital Mumbai and tech hub Bengaluru.
It had expanded rapidly since its founding in 2019 and last year secured $24 million in a fundraising round led by Swiss climate finance firm Responsability Investments.
The Securities and Exchange Board of India this week ordered a probe into Gensol Engineering, a sister solar energy company of BluSmart, after it found irregularities in funds meant to buy new cars.
It accused Gensol of using "layered transactions" to obscure the use of funds that were "partly utilised for buying a high-end apartment".
BluSmart said in an email to customers that it had "decided to temporarily close bookings" on its platform.
"While we strive to be back soon to serve you with the same warmth and smile, we will initiate a refund within the next 90 days if services do not resume before then," it added.
Many BluSmart customers took to social media on Thursday asking how they could be refunded money already deposited for rides.
Local media reports said BluSmart was likely to lease its fleet in phases to Indian market leader Uber.