The Story That Got Everyone Talking

In today’s India, where startups are growing rapidly and the electric vehicle (EV) sector is evolving fast, BluSmart emerged as a symbol of innovation. It promised clean mobility, ethical practices, and a better future for cities and drivers alike. Founded by Anmol Singh Jaggi and others, the company aimed to change how ride-hailing works, using only electric vehicles.

But in April 2025, that image was shattered.

India’s Securities and Exchange Board (SEBI) accused Jaggi of diverting investor funds for personal gain. Allegations included using company money to buy a luxury apartment, lacking transparency in financial reporting, and violating corporate governance norms. The company halted services in key areas, leaving drivers, customers, and investors in confusion and concern.

Suddenly, the term “corporate governance” wasn’t just boardroom jargon. It was front-page news.

What Is Corporate Governance?

In simple terms, corporate governance refers to the systems, principles, and processes by which a company is directed and controlled. It defines the relationship among the board of directors, management, shareholders, and other stakeholders.

Think of a company as a car. Corporate governance is the steering system. It doesn’t matter how powerful the engine (your business idea or funding) is—if the steering is faulty, the company is headed for disaster.

A Simple Example to Understand

Let’s say you live in an apartment complex. Everyone contributes to the maintenance fund. A few residents are elected to manage the finances and ensure repairs and services are handled. Now imagine if the treasurer uses that fund to renovate his own flat, without informing others. That’s a governance failure.

The same principle applies to companies—but on a much larger and more complex scale.

Where BluSmart Went Wrong

Based on public reports and SEBI’s investigation, BluSmart was found lacking on multiple governance fronts:

• Investor funds were allegedly diverted for personal use, including high-value real estate.
   

• There was no clear or timely financial reporting to shareholders.
   

• Internal checks and balances were either absent or ignored.
   

• The board structure lacked independent voices who could hold the leadership accountable.
   

What started as a bold idea ended up as a cautionary tale—not because the business model failed, but because corporate governance failed.

Why Corporate Governance Matters

Corporate governance is not just about compliance. It’s about building sustainable businesses that can grow, adapt, and be trusted.

Strong corporate governance ensures:

• Protection of shareholder and investor interests
   

• Transparency in decision-making and reporting
   

• Clear accountability within the organization
   

• Better financial health and risk management
   

• Long-term sustainability and brand value
   

Without governance, companies are vulnerable to fraud, inefficiency, and reputational damage.

Key Components of Corporate Governance

A well-governed company usually incorporates these elements:

How to Ensure Corporate Governance in a Company

Good governance is not just for big corporations. Even startups must build a culture of integrity and accountability. Here are the key steps:

1. Build a Balanced and Independent Board

Include not only founders and investors but also independent directors who can provide unbiased opinions.

2. Define Roles and Responsibilities

From CEO to junior staff, everyone must know their role and be held accountable for it.

3. Establish Internal Controls

Put in place financial monitoring systems, routine audits, and whistleblower policies.

4. Promote Transparency

Communicate with stakeholders regularly and share material information openly.

5. Create Committees for Oversight

Set up audit, ethics, and risk committees that function independently of executive management.

6. Foster a Culture of Ethics

Create and enforce a code of conduct. Train employees and leadership on ethical practices and compliance.

7. Engage Chartered Accountants (CAs)

This is often underestimated, but CAs play a central role in enforcing governance.

The Role of Chartered Accountants in Corporate Governance

While founders are visionaries, Chartered Accountants are the watchdogs of financial discipline and legal compliance. Their role is not limited to bookkeeping or tax filing. In a governance context, they act as strategic advisors and independent gatekeepers.

Here's how a CA supports corporate governance:

In the BluSmart case, proper involvement of CAs and an empowered audit committee might have caught fund mismanagement early, potentially saving the company’s reputation and operations.

Lessons from BluSmart

BluSmart’s downfall is a painful but important reminder that governance failures are as destructive as flawed business models.

• A promising idea is not enough; it must be supported by accountability and transparency.
   

• Power without oversight creates a breeding ground for unethical behavior.
   

• Governance should be built into the DNA of the company—not added as an afterthought.
   

Every business, regardless of its size or industry, needs governance mechanisms that evolve as it scales. Neglecting it may not cause immediate damage, but it always comes with long-term consequences.

The Bigger Picture: Governance in the Indian Startup Ecosystem

India's startup ecosystem is growing at breakneck speed. With billions of dollars flowing into new-age companies, governance must keep pace with innovation.

Regulators like SEBI and the Ministry of Corporate Affairs are tightening norms, but founders must take proactive steps. Corporate governance should be seen not as a regulatory burden, but as a tool for building trust, stability, and legacy.

Conclusion: Accountability is the Real Innovation

BluSmart had the ambition, the technology, and the early success stories. But what it lacked was robust corporate governance. And that proved to be its undoing.

Whether you’re an early-stage founder or running a listed company, the message is clear:

Innovation gets you noticed. Governance keeps you respected.

In a world that is increasingly connected and transparent, companies that prioritize ethical leadership and financial integrity will be the ones that endure.

And in this journey, partnering with professionals like TwoTax is not optional—it is essential.