Another scam just hit this week. Blusmart and Gensol's billion-dollar valuations (as well as the hard-earned investments of millions of retail investors) were wiped out by a single SEBI order.
In such times, the real asset isn’t money.
It's knowing the truth and how to use it. How? Let's find out.
Why Knowing What’s True is Rarer And More Valuable Than Ever
We live in a time when:
- You can raise millions and crores using just a pitch deck and some AI-based jargon instead of a real product or service.
- Any fraudster can become a funded founder.
- And “due diligence” sometimes means checking the follower count on LinkedIn.
Let me be direct here.
Most of the business and professional world doesn’t care what’s true. It cares what works.
That’s the core of the problem—and also, the core of the mental model that can help you navigate this world: knowing v/s using the truth in your business or profession.
What Is True? v/s What To Do?
Epistemic Rationality vs Instrumental Rationality
At its core, rationality in every business or profession has two faces.
Understanding the difference between them can dramatically improve how you think, decide, lead, invest—and live.
There are basically two kinds of rationality that you use as a professional, investor or entrepreneur:
1. Epistemic Rationality: What Is True?
- This is about believing what is true.
- It asks: Is this real?
- It values evidence, logic, and brutal honesty with oneself.
- In finance, it’s the analyst who says: “This stocks sounds amazing, but the fundamentals are garbage.”
2. Instrumental Rationality: What To Do?
- This is about knowing what to do.
- It asks: Will this get me what I want?
- It values tactics, persuasion, narrative.
- In business, it’s the founder who says: “We’ll fake it till we make it.”
Both are useful. There's just one small difference.
Instrumental rationality is rewarded faster. Epistemic rationality is rewarded for longer.
Why This Distinction Matters
Most people confuse these two—and that leads to terrible decisions.
- They mistake confidence for truth.
- They optimise for winning arguments, not understanding reality.
- They build businesses and careers that signal success instead of delivering it.
And the worst part?
They act before checking if what they believe is even real.
Let's understand this with the latest case doing the rounds across media recently.
What Happened to Gensol: The Unfolding Crisis in Facts And What It Teaches Us About Truth
In mid-April 2025, SEBI released an explosive 29-page order outlining a series of staggering violations by Gensol Engineering Ltd and its promoters, in connection with its subsidiary Blusmart Mobility and others. Blusmart was a darling of the cab hailing space, with electric cabs and superior service compared to Uber and Ola.
The allegations in SEBI's order read like a forensic novel:
- ₹977.75 crore borrowed to procure 6,400 EVs.
- Only 4,704 vehicles delivered.
- Over ₹200 crore unaccounted for.
- Circular fund flows between Gensol, its subsidiaries, its dealers, and its promoters.
- Funds diverted for luxury apartments at DLF’s The Camellias.
- Fabricated debt servicing statements submitted to Credit Rating Agencies.
- Forged letters from institutional lenders like IREDA and PFC.
- False disclosures of 30,000 vehicle orders via vague MOUs.
- Stock manipulation through related party entities like Wellray.
- Shell entities and layering strategies designed to obfuscate the end use of public money.
If it weren’t real, it would feel fictional. But most fiction has plot holes.
This didn’t. It seemed designed to work—and that’s exactly the problem.
This Isn't Just a Case. It Is a Case Study in Cognitive Collapse
At every stage of this saga, key players seem to have made a choice:
- To believe what was useful, not what was true.
- To act based on what works, not what’s real.
- To design outcomes before validating assumptions.
This is instrumental rationality gone rogue.
This is what the case looks like when we look at it from the What is True (Epistemic) v/s What To Do (Instrumental) framework:
| Actor | Instrumental Thinking | Lack of Epistemic Thinking |
|---|---|---|
| Founders | Show growth, raise funds, dazzle markets. | Didn’t verify vehicle delivery count, use of funds, governance exposure. |
| Investors | Chase ESG narrative, green disruption, ride the hype. | Didn’t audit EV inventory, fund flow, or debt obligations. |
| Credit Agencies | Rate based on surface metrics and issuer disclosures. | Didn’t cross-verify conduct letters until defaults surfaced. |
| Exchanges | Publish disclosures. Celebrate growth. | Didn’t test manufacturing activity (which electricity bills disproved). |
| Analysts and Media | Glorify India’s Tesla moment. | Never asked: “Where are the cars?” “What is the plant’s capacity?” |
The entire ecosystem had outsourced epistemic effort. In simple words:
Everyone assumed someone else had checked. Nobody had.
What Happens When The Truth Is Skipped
In the long run, the truth has a terrifying (and wonderful) property:
It always shows up.
And when it does, it destroys everything built on its denial.
The Gensol SEBI order is filled with allegedly fake comfort given by the company to itself and others:
- No-default statements.
- Self-certified ratings.
- Internal fund flows designed to appear clean.
- MOUs made to look like binding contracts.
- Pledges dressed as promoter confidence.
Each of these worked—until they didn’t.
That’s the cost of skipping the truth.
Skipping The Truth Is Plain Stupid
Let’s ignore the law and regulatory violations for a minute and just reframe the Gensol case as a sequence of fundamental cognitive errors on the part of those overseeing, investing in or managing Gensol. If not malicious, this ignorance on their part is a rare occurrence of 360-degree stupidity:
- Confusing visibility with verification→ “It’s in the investor presentation, it must be real.”
- Confusing complexity with competence→ “Look at all the entities, bank accounts, transactions—they must know what they’re doing.”
- Confusing correlation with causation→ “Stock is rising, so the company must be healthy.”
- Confusing disclosure with honesty→ “They’ve disclosed a partnership; the deal must be signed.”
The Indian Scams Blueprint: How Falsehood Spreads In Markets, Businesses and Professions
This recent case wasn’t the first company, and won’t be the last, to get caught in its own echo chamber in India.
What’s shocking isn’t that it happened.
What’s shocking is how easily it happened.
Why? Because instrumental rationality had taken over.
Everyone optimised for what would get the next yes, not for what was actually real.
The Truth Bubble Keeps Popping in the Markets
We’re not just living in a financial bubble.
We’re living in a truth bubble.
And it keeps popping.
Every few quarters, a new mess hits the headlines.
This time? SEBI's allegations about Gensol and Blusmart.
A climate-conscious, EV-powered, tech-forward Indian startup that SEBI's order states is built on circular transactions, fake documents and bad governance.
But the SEBI case isn’t just about allegedly cooked books.
It’s about how many people in the system—investors, media, analysts, even customers—chose not to ask the only question that really matters:
“Is any of this true?”
The Incentive Problem: Why Most People Choose 'What Works' Over 'What's True'
Here’s the quiet but disturbing truth:
Instrumental rationality is faster.
Rather than base your decisions and actions on the truth, it's faster to:
- Fake it, raise it, scale it and exit it.
- Check the right box, and get the right amount.
- Say the right acronym (AI, EV, SDG, LLM, GPT, SaaS), and people stop asking real questions.
The whole system seems to have evolved to reward the appearance of success—not the substance of it.
But here’s my simple counter-thesis:
Epistemic rationality compounds.
It’s slower, yes. But it snowballs over time.
The Mental Model of Truth: Why The Sequence Matters
Here’s the trick to leverage both gears of truth:
Use epistemic rationality first—then instrumental rationality. Always.
- First ask: What is true? What’s really going on here?
- Then ask: What should I do about it?
Reversing this order is like building your strategy on sand. It might look smart for a while—but it will collapse.
A Real-World Example:
An Entrepreneur With Instrumental What To Do-First Thinking:
“How do I raise funds fast?” → “Add AI to the deck yaar. Claim 10x growth. Show some demand bro.” → Then: This entrepreneur assumes demand exists without verifying, and builds a business on a lie.
An Entrepreneur With Epistemic What Is True-First Thinking:
“Is there real demand for this product?” → “What do the numbers, feedback, and data say?” → Then: “How do I tell that truth in a way that resonates with investors?”
The second entrepreneur is playing a long game. The first one is gambling.
SEBI seems to suggest Blusmart and Gensol chose the former road. Enron, Theranos, and WeWork seem to have done so too.
They all seem to have hacked what works. But no one supervising them asked what’s true.
And eventually, that truth bill always comes due.
What Does 'The Truth' Even Mean in Business & Professions?
In any domain—be it business, finance, science, or philosophy—truth is not an abstract ideal. It’s the most practical, high-leverage idea in the world.
In business and your profession, truth isn’t just a virtue—it’s a system requirement.
It’s not a “nice to have.” It’s the difference between a resilient enterprise or career and a ticking time bomb.
Between durability and collapse.
Between compounding trust and compounding fraud.
And yet, the world we operate in increasingly rewards what looks true, rather than what is true.
It rewards those who sound confident, not those who are correct.
It celebrates scale, not sustainability.
Visibility, not verifiability.
Velocity, not validity.
- In business, truth is coherence—between promise, process, and proof.
- In finance, truth is discipline—between capital, performance, and risk.
- In governance, truth is transparency—between power and accountability.
You can lie for a while. But eventually, all systems—economic, moral, physical—settle their books with reality.
And reality has no tolerance for delusion, no patience for pretense, and no mercy for those who mistake appearances for truth.
Truth in business isn’t just honesty.
It’s internal consistency + external verifiability.
Too many people are building businesses or careers that signal or project health instead of being healthy.
The result? The world mistakes theatricality for the truth.
Don't be one of them. And don't fall for one of them.
What This Means for You
Whether you're:
- A retail investor being wooed by "next big thing" pitches
- An entrepreneur or professional crafting a presentation or report
- A student trying to build a mental model
- Or a compliance professional trying to avoid such a mess
Ask yourself this one question:
“Is what I believe true? Or is it just convenient?”
Because the greatest edge in markets, business and work is not speed. It’s knowing the truth.
In your own life, your work, your analysis, and your decisions—
You don’t need to wait for the world to change.
Just start asking:
“Is this real?”
“Is this consistent?”
“Is this true?”
And the ultimate test is this:
Can this assumption survive scrutiny?
If your financials, product, culture, report, presentation or team look better the closer they’re examined—you’re built on truth.
Because truth isn’t just about compliance.
It’s about resilience.
Lies melt in heat. Truth hardens under pressure.
SEBI orders are just the latest warnings.
But they won’t be the last.
And until we make truth-seeking cool again, this cycle will repeat.
Why Truth Will Matter More in Markets, Careers and Businesses
In a world of AI-hallucinated information, fake news and easily manipulated metrics—truth has become paradoxically scarce and disproportionately powerful.
Knowing what is true is harder than ever.
And that’s exactly why it’s more valuable than ever.
- In a sea of perception, truth is your only anchor.
- In a marketplace of manipulation, truth is your only moat.
- And in a system built on trust, truth is the last remaining currency.
So whether you’re building a startup, managing a portfolio, leading a team, or teaching in a classroom— you would do well to build your edge on this one principle:
Truth isn’t just a moral preference anymore. It’s the only true defense for survival.
Because the market may forget cleverness. But it always remembers truth.
Final Thought
What such cases reveal isn’t a one-off scandal.
It’s a systemic vulnerability in how we think.
The greatest risk in markets, professions and businesses today isn’t fraud. It’s the institutionalisation of the 'failure to look for truth'.
So here’s the question you must now ask as a habit—daily and ruthlessly:
Is this true?
Not: Is this convincing?
Not: Is this working?
But: Is this real?
Because when you optimise only for what works, you might win faster.
But when you optimise first for what’s true, you stay standing longer.
And in business—as in life—staying in the game longer beats winning once and exploding.
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