New Delhi [India]April 20 (ANI): S Ravi, former chairman of the Mumbai Stock Exchange (BSE), expressed deep concern over the recent allegations surrounding Blusmart, adding that such incidents would harm investor trusts and undermine broad awareness of startups.
S Ravi (Sethurathnam Ravi), former BSE chairman and founder of Ravi Rajan & Co, warned that such actions can shake investors’ confidence in new businesses and damage the credibility of even mature startups.
Recently, the Securities and Exchange Commission (SEBI), the Indian market regulator, marked issues related to so-called fund transfers and forgery of Gensol Engineering Ltd, which affected Blusmart, which led to the company’s service closure.
Anmol Singh Jaggi and his brother Puneet Singh Jaggi are co-founders of Blusmart and directors of Gensol Engineering, an Ahmedabad-based solar engineering and services company. After SEBI notified, both resigned from their posts as director.
“That’s not two reasons. Once new investors, new companies come there, these people (investors) simply won’t start funding them, (they will) stop funding. They’ll feel like these startups are just personal gains and valuations, so it’s not a good thing, it’s a total good thing.”
The former BSE chairman added: “A very good brand because Blusmart is not a very small brand because it is very well built. They removed it… They demolished it for personal gain. They could have made money, but you know the shortcut isn’t right.”
The former BSE chairman stressed that there were allegations of insider trading and mismanagement and funding transfers.
By definition, insider trading is the use of confidential non-public information to buy or sell company shares.
“There are two trigger points. First, the pricing occurs in the share. There are many complaints about internal transactions. Second, there is a vision blower, and there is a complaint about the company. Sebi investigated and made temporary orders. In the temporary orders, they found some differences in some deficits. In this case, it was a stage of diversification, and another diversified competition,” again by chance. Added.
Going forward, Ravi recommends that startups and promoters should communicate more and make more honest disclosures to stop such incidents.
He added: “The startup community must now start communicating with all lenders and stakeholders and demonstrate their confidence in working together in a good governance structure.”
Speaking of the role of independent directors and auditors, he asserted that salesmen should provide accurate information to provide better disclosure. (ANI)
